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l7-i(Rev. 8-11-03)
ATTENTION
The following documents appearing in FBI files have been reviewed under the provisions of The Freedom of
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4f
PAGE TWO PH 194C-i«EW UNCLAS
OFFICE FOR THE STATE OF PENNSYLVANIA CONCERNING THE SUBJECTS.
FOR BACKGROUND, RECENT STATUTES ALLOW FOR THE RECOVERY OF FICA
TAXES PAID BY THE STATE OF PENNSYLVANIA FOR EMPLOYEES WHILE ON
SICK LEAVE. IT IS ESTIMATED THAT 25 TO 40 MILLION DOLLARS WILL
BE RECOVERED UNDER THIS ACT. IT IS ALLEGED THAT COMPUTER
TECHNOLOGY ASSOCIATES, INC. (CTA) , ARRANGED FOR LEGISLATION
TO BE PASSED ALLOWING THE TREASURER'S OFFICE TO RECOVER THE
FUI'iDS. THIS LEGISLATION ALLEGEDLY WAS PASSED THROUGH | |
| . SUBSEQUENTLY, A CONTRACT WAS AWARDED
TO CTA WHICH WILL RESULT IN INCOME TO CTA ESTIMATED TO BE IN
EXCESS OF $5 ,000,000. A PROPOSAL FROM ARTHUR A. YOUNG AND
COMPANY, CPA, WITH A MAXIMUM COST OF 2.8 MILLION DOLLARS WAS
REJECTED .
] AUDITOR GENERAL'S OFFICE,
I NT ER VIEWED
1
OF CTA,
1 ~l
1 1 Ion JUNE 4 ,
1984. 1
ADVISED THAT JOHN TORQUATO
WAS THE REAL OWNER
OF CTA AND THROUGH WILLIAM SMITH, ATTORNEY, HARRISBURG, PA,
PRESENTLY CHAIRMAN OF THE DAUPHIN COUNTY REPUBLICAN COMMITTEE,
WAS ABLE TO GET AN AMENDMENT TO A BILL THAT ALLOWED THE STATE
b6
b7C
b6
b7C
PAGE THREE PH 194C-NEW UNCLAS
TREASURER TO MAKE PICA RECOVERIES. TORQUATO REPORTEDLY GOT
1
TO SPONSOR THE
AMENDMENT AND KNOWS |
1
1 FROM PITTSBURGH. TORQUATO
IS SUPPOSED TO HAVE FLOWn| ~
IaND subject DAVID I.
HERBERT TO CALIFORNIA TO LOOK AT CTA’S WORK. TORQUATO PAID FOR
$40,000 A YEAR JOB IF CTA RECEIVED THE WORK IN PENNSYLVANIA AND
HAS RECEIVED AN AIRLINE TICKET TO FLORIDA TO VISIT A GIRLFRIEND
FROM CTA. I [ REPORTEDLY MADE A $1,000 CONTRIBUTION TO
THE STATE OF PENNSYLVANIA REPUBLICAN PARTY AT THE REQUEST OF
SUBJECT SMITH AND WAS REIMBURSED BY CTA WHICH CONTRIBUTION WAS
MADE AT TORQUATO'S REQUEST TO HELP GET THE LEGISLATION PASSED.
ACCORDING T0 | | tO RECEIVE THE CONTRACT, CTA WAS TO
PAY $300,000 TO THE CAMPAIGN OF TREASURER DWYER FROM THE
PROFITS OF THE FICA RECOVERY MADE FOR THE SCHOOL DISTRICTS OF
PENNSYLVANIA. THE CONTRACT WAS REPORTEDLY UNDER THE DEPARTMENT
OF EDUCATION A® IT WAS CHANGED TO THE TREASURY DEPARTMENT
BECAUSE TREASURER DWYER WOULD HELP CTA GET THE CONTRACT BY
b6
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b6
b7C
PAGE FOUR PH 194C-!«W UHCLAS
VIRTUE OF THE PAYOFF,
DEPARTMENT, IS TORQUATO’S
FREASURY
’S
^THAT SELECTED CTA FOR THE FICA RECOVERY CONTRACT,
^STATES THAT AN FICA ANALYSIS REPORT AT CTA, WHICH WAS
SEEN BY FORMER CTA EMPLOYE:
[
TELEPHO NE
3 .
HAD A BREAK DOWN
OF THE PENNSYLVANIA CONTRACT COST INCLUDING $100,000 TO^
$300,000 TO "OUR GUY" AT 50 PERCENT OF THE FICA PROFIT TO SMITH.
HERBIE WAS IDENTIFIED AS DAVID HERBERT, THE ANALYSIS IS REPOR-
TEDLY KEPT IN A FILE CABINET IN TORQUATO’S HOUSE, I H
ALLEGES THAT ALLEGHENY COUNTY, PA, OFFICIALS RECEIVED $102,000
IN PAYOFFS FOR FICA RECOVERY WORK FOR THAT COUNTY FROM TORQUATO,
THREATENED BY TORQUATO IN CONNECTION WITH HIS EMPLOYMENT AND
MAY BE SUED BY TORQUATO ACCORDING TO | |
HERBERT IS INVOLVED IN THE APPROVAL OF FICA RECOVERY
b6
b7C
b6
b7C
b6
b7C
REQEST FOR THE STATE OF PENNSYLVANIA AND REPORTEDLY IS GOING
TO AID CTA IN GETTING THE REQUEST PROCESSED EXPEDITIOUSLY.
b6
b7C
PAGE FIVE PH 194C-NEW UNCLAS
FOR THE INFORMATION OF LOS ANGELES, THE AUDITOR GENERAL
IS RUNNING AGAINST TREASURER DWYER IN THE UPCOMING ELECTION
Ai® KIS OFFICE IS CONTEMPLATING A PRESS RELEASE ON THIS MATTER.
PHILADELPHIA IS ATTEMPTING TO DETERMINE THE ACCURACY OF THE
INFORMATION AND GET FIRSTHAND INFORMATION PRIOR TO PROCEEDING
WITH OTHER LOGICAL INVESTIGATION. LOS ANGELES LEAD AGENT IS
REQUESTED TO TELEPHONICALL Y CONTACT SSRA I I
HARRISBURG, PA, RESIDENT AGENCY, FOR ADDITIONAL DETAILS CONCERN-
IMG THIS MATTER.
FTS TELEPHONeI
1 OR COMMERCIAL TELE-
b6
PHord
□
b7C
LOS ANGELES AT WESTMINSTER, CA: WILL IMMEDIATELY INTERVIEW
t TELEPHONE | |
IN DETAIL AS SET FORTH ABOVE INCLUDING DETAILS OF CONTACTS
WITH EACH OF THE SUBJECTS. ALSO DETERMINE Tf I
1 WOULD
BE COOPERATIVE IF CONTACTED BY THE FBI AND IF[[
]has a
COCTINUING RELATIONSHIP WITH ANY CTA EMH-OYEES.
LOS ANGELES AT NEWPORT BEACH, CA : WILL LOCATE AND INTERVIEW
I I TELEPHONE I
□□
TO DETERMINE HIS KNOWLEDGE OF THE ABOVE SITUATION.
LOS ANGELES AT HUNGTINQTON BEACH, CA : WILL INTERVIEw[[
PAGE SIX PH I94C-NEW UNaAS
I TO DETERMINE HER KNOW-
LEDGE OF THE ABOVE ALLEGATIONS AND THE EXISTENCE, CONTENTS AND
LOCATION OF THE COST BREAKDOWN FOR PENNSYLVANIA CONTRACT,
PH 016 1842155Z
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R022155Z JULY84
2i 5^
‘•■"•WT/ON
V PKILftDCLPHIA KlS4C-36n (HRft)
TO DIRECTOR, FTBI (ROUTINE) '
LOS ANGELES (ROu/lNE)
PITTSBURGH CROIWINE)
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Dirtdor’s Scc’y
U N C L A S . , • . \ ^ ^ ^
R. BUDD ^fYER: TREASURER OF PENNSYLVANIA:!
treasury department, commonwealth of Pennsylvania; david.
l/5^RBNj:RT, DIRECTOR, BUREAU OF SOCIAL SECURITY FOR PUBLIC EMPLOYE&S
DEPARTMEi^
LABOR AND INDUSTRY, COMMONWEALTH OF PENNSYLVANIA; T
Anihmfsm^
.0.,«-0M.EE4 JUDYs^ELLIS , PRESIDENT COMPUTER
TECHNOLOGY AS^CIATES, I NC. ,, NEWPORT BEACH, CALIFORNIA? HOBBS ACT;-
R'E'T'ELCALL OF SSRA HARRISBURG TO SSRA SANTA AMA, JUNE 25, 1584
AND PHILADELPHIA TELETYPE TO DIRECTOR , LOS ANGELES' AND P ITTSBTTHGW^^
DATED JUNE 25 , 1584. ^ -^'JL Sj
REFERENCED PHONE CALL INVOLVED DETAILS CONCERNING THE'TfgSDJ'OR
IfTTERVIEWS, POSSIBLE CONSEfiSUAL MONITORINGS AND SERVE SEARCH WARRANTS
REGARDING THIS CASE. ‘ ’
SASI
AND
OF THE Harrisburg
RESIDENT 'AGENCY WILL TRAVEL TO CALIFORNlA-*ON JULY 2,' 1984 AND WILL
COORDINATE THEIR ACTIVITIES WITH SA
RESIDENT AGENCY.
3F THE SANTA aNA
SACS PHILADELPHIA AND LOS AMGELES CONCUR- WITH THIS. TRAVEL.
BT
b6
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ST
LjCLAS _
FEDuT. \L BUBEAU
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'^udcf^COi
( 5 C^
R. 3U DP ^^YE R; TREASURER OF PEiiESYL VA??IA s ST AL5 H0B3S ACT - CPO,
(00: PHILADELPHIA)
RE PHILADELPHIA TELETYPE TO THE BUREAU, DATED JUi’lE 25, 1934.
ALTHOUGH MO DETAILED DESCRIPTIVE DATA COUTAI?)SD IM RE?‘£REiMCED
TELETYPE RE JOHM TOROUATO, IT APPEARS HE '^IGHT 3E IDENTICAL UITH
SUBJECT OF CLOSED PITTSBURGH FILE 194-12, SUFILE 92-i85GE, ENTITLE
"JOHH TORDUATO, CHAIFH-1AU, CAH3RIA COUUTY DE’-IOCRATIC CO'-r-lITTEE;
AL; H033S ACT - CPA,- (00: PITTSBURGH)
TOEOUATO IH 197S, AS THE 70 YEAR OLD FOR^.
THIS FILS DESCRIBED
OR^ER CHAIRHAU OF THE D’|_^^
CHATIC COHHITTEE OF CAHBPJa COUHV, PA. IH THIS CASE, TORCUATO
PG 194C-2S7
ONCLAS
-PAS':' rio
4
VTOLATI0^5 OF TITL2 18, STiCTIOW 1951, U. S. CODE, A i'.’D Of)E (1) COU^T
OF VlOLAXlOi^ OF TITLE 18, SECTlOi^ E, U. S. CODE. \iZ VJAS SEMTEMCED
0:'5 MOVE'^ER 15, 197S, TO FIVE C5) YEARS CUSTODY OF THE ATTORMEY
GEi^EHAL, FINED .$ i G , 00 0, AND ORDERED TO PAY ONE- THIRD OF THE COURT
COSTS.
IT HAS BEEN DETERMIMED THAT TORQUATO'- HAS SINCE SERVED THAT
SENTENCE AND IS NOU RESIDING IN CA^ISRIA COUtlTY^ PA. HE DOES NOT
HOLD ANY KNOV/N PUBLIC OFFICE,
IMFORMATIOM BEING PROVIDED FOR THE INVESTIGATIVE ASSISTANCE OF
PHILADELPHIA AND OTHER OFFICES, AND NO ACTIVE INVESTIGATION V/ILL
3E' CONDUCTED BY PITTS3URGK AT THIS HHE.
31
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PHO^ri 2000 12 IZ
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TO
tr
U C L
DIRECTOR, FBI (ROUT IMF)
3
9/9
ATTENTION: WHITE COi^LAH CRI^E SECTION AND TECHNICAL SiRV
P. BUD D^^YE Rs T RF-ASIIRFR , QOm ONWE ALT H OF ?E NN gnv- AN lA ; FT AL
H0B3S ACT ; 00: PHILADELPHIA '
RE PHILADELPHIA TELEPHONE CALL TO THE BUREAU JU-Y 12, 15 84
R *'
'
;
f
< JaTu^lic Affs, J ■■
I ^
i, HSgipiTO .,. , ..
3 SCHSDiiED TO APPEAR BEFORE A FEDERAL GF^
. PESMSYLVA5JIA, ON JULY'sA, 1934. I
-■
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, received ■
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Philadelphia 194 c-36! (hra> cp)
director
ROUTINE
PITTSBURGH 194C-267 ROUTINE
U N C L A S
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Director's Sec’y ^
R. BUDD'-TWYE.R , trea surer of PENNSYLVANIA;!
I I, TREA SURY DEPARTMENT , mj^.inM v!E/M TH_.n F
PEMNSVL VANIA ; DAVID I^HERBERT, DI RECTOR , BUREAU OF SOCIAL SECURITY^
FO R- PUBLIC EMPLOYEES, PENNSYLVANIA DEPARTMENT OF L ABQ R AND IND I STR^'Z
O OHMONtlEALTH FO P ENN SYL V^ U ; W ILL I A^« IT H ; jO QU ATO , .ijT. iy
OVI NER, computer T E CHNOLOGY ASSOCIATES. INC. (CTA>, NEWPORT BEACH, | j
C ALIFORNIA ; JUD'^LLIS, PR ESIDENT , CTA ; HOBBS ACT-0?f3 sPH f
RE PH AIRTTEL TO Bu 7/6/84, PH TEL TO BU 6/25/84 AND PH TEl/.TO.^^
7/17/84. ^
m-
FOR THE INFORMATION OF THE BUREAU APRIL 4, 1984 THE GOVERNOR OF
- J2 JUL f
PENNSYLVANIA SIGNED INTO LAW SENATE AMMENDED HOUSE BILL NUMBHIR, 1397
WHICH GAVE THE TREASURER OF PENNSLVANiA THE AUTHORIZATION TO -RECOVER
ON behalf OF THE COMMONWEALTH OF PENNSYLVANIA ALONG WITH THE STATE
Re .
ceiu; • L- ,
53 SEP 101
\ :ri .v'i|
PAGE two; U N C L a S PH194C-361
■A
SCHOOLS districts AND OTHER SCHOOL ENTITIES SOCIAL SECURITY OVEr'-
PAYmENTS made by employees on SICK LEAVE POR THE YEARS 1979, 19 80 AMD
1981. IT FURTHER GAVE THE TREASURER THE POWER TO TAKE WHATEVER ACTION
HE DEEMS RESONABLE TO RECOVER SUCH OVERPAYMENTS. ON MAY 10, 1984 THE
TREASURER'S OFFCIE ENTERED INTO A OOOTACT WITH CTA A CALIFORNIA BASED
CORPORATION TO RECOVER THE ABOVE DESCRIBED FUNDS. IT IS ESTIMATED
THAT 25 - 40 MILLION DOLLARS WILL BE RECOVERED UNDER THIS PROGRAM.
THE contract CALLS FOR CTA TO BE PAID SEVEN DOLLARS AND SEVENTY FIVE Ci
PER PERSON PER YEAR FOR THIS SERVICE WHICH FOR .THE MINIMUM RECOVERY
IS approximately five million dollars, a proposal for a competing
company, ARTHUR YOUNG AND COMPANY, CPA, WITH A MAXIMUM COST OF 3.8
million dollars was rejected.
former CTA EMPLOYEe P | ADVISED THAT JOHN TORQUATO
IS THE real owner OF CTA HOWEVER, TO REFLECT THIS COMPANY TO BE A
minority owned company he LISt | I AND I I
I I TORQUATO, WITH THE ASSISTANCE OF WILLIAM SMITH,
~k ND PRESENTLY CHAIRMAN OF THE DAUPHIN COUNTY REPUBLICAN
COMMITTEE, HARRISBURG, PA WAS ABLE TO GET THE, LEG ISLATURE FOR THE
commonwealth of pa to pass an ammendment to an existing law allowing
THE treasurer OF PENNSYLVANIA TO MAKE THE ABOVE DESCRIBED RECOVERY.
IN ADDITION, DAVID I. HERBERT, DIRECTOR OF SOCIAL SECURITY FOR PUBLIC
employees FDR THE COMMONWEALTH FO Pa WAS ALLEGEDLY FLO.WN TO CALIFORNIA
PAGE THREE, U N C L A S PH194C-36I
TO LOOK OVER CTA’S WORK
■ ■
IFURTHER advised TORQUaTO HaD.-'HER
SEND A $1,000.00 check TO THE PENNSYLVANIA REPUBLICAN STATE COMMITTEE
AT SMITH'S REQUEST. SHE LATER CLAIMS SHE WAS REIMBURSED THIS MONEY
BY TORQUATO.
I I STATED TO RECEIVE THE CONTRACT CTA WAS TO PaY $300,000.00
TO THE state TREASURER R. BUDD DWYER’S CAMPAIGN FUND FROM THE PROFITS
OF THE FICA RECOVERY MADE FOR THE SCHOOL ENTITIES OF PA.
FOR THE treasurer WAS THE
WHO subsequently selected STA FOR THE CONTRACT. IN ADDITION,
STATED AND FICA ANALYSIS REPORT AT CTA WHICH WAS SEEN BY FORMER CTA
Employee tori rees of huntington beach, ca had a breakdown of the pa
contract COST, this breakdown reflected the amount OF $100,000.00
TO “HERBIE", $300,000.00 TO "OUR Gur , AND' $200,000.00 TO OTHERS. .
HERBIE WAS INDENTIFIED AS HERBERT AND OUR GUY WAS INDETIFIES aS DwYER,
IN ADDITIOn T I lLLEDGES PITTSBURGH, PA AND THE ALLEGHENY COUNTY
PA officials INDENTITY UNKNOWN RECEIVED $102,000.00 IN PAYOFFS FOR
FICA RECOVERY WORK PERFORMED BY TORQUATO. SHE FURTHER STATES HERBERT
WAS VERY MUCH INVOLVED IN AIDING CTA'S EFFORTS TO OBTAIN THE CONTRACT
AND Later getting the recoverty processed expeditiously.
ON JULY 6, 1984 A SEARCH WARRANT WAS EXECUTED ON THE RESIDENCE/
b6
b7C
OFFICE OF JOHN TORQUATO IN NEWPORT BEACH, Ca. ABONS THE ITEMS SEIZED
'ii'
WERE several COMPUTER miNTOUTS WHICH CONFIRMED THE INFORMATION
supplied B.t | 1 ANd | ~[ NUMEROUS INTERVIEWS WERE CONDUCTED IN
PA concurrently with the execution of the search warrant in CA. ON
INTERVIEW I I ADMITTED BEING OFFERED $100,000.00 TO BE PLACED
IN A SWISS Back account but aAIMED he did NOT TAKE THE OFFER
SERlOUSLYi ADDITIONALLY INVESTIGATION INDICATED THAT AN OFFER OF
$100,000.00 WAS made to
FOR PA
1 1
IS ON THE UNITED STATES ATTORNEY
GENERAL ADVISORY COMMITTEE. THE INVESTIGATION ALSO POINTS TO POSSIBLE
INVOLVEMENT BY PaI
LEGISLTATION AND ALLEGEDLY]
from CTA.
IN THE Passing OF the
WAS TO RECEIVE A JOB
I [ and OTHER members OF THE OFFICE OF THE ATTORNEY GENERAL
HAVE BEEN INTERVIEWED AND CONFIRMED THAT j I wAS OFFERED $100,000.00
IN connection WITH THE ISSUANCE OF AN ATTORNEY GENERAL'S OPINION.
NO ACTION WAS TAKEN BY THE ATTORNEY GENERAL’S OFFICE CONCERNING THIS
offer.
PHILADLEPHIA IS CONTINUING THIS INVESTIGATION ON A PRIORITY
basis and anticipates interviewing other individuals WITHIN THE STATE
GOVERNMENT TO TNaUDE PERSONNEL IN THE GOVERNOR’S OFFICE AND THE
attorney general.
PHO013 18822452
R 062245Z JUL S/
R '£ C E. ' V E D
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hJuiJil 23 3 0 |^^
FtaERAl- BUREali
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PHILAMLPHIA C 1940-361) CHRA) CP)
DIRe/tOR, FBI (ROUTINE) ~
|a$sL C«-:
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§ ijfephof’s Rin^
U N C L A S
ATTENTIOf^: WHITE COLLAR CRIME SECTION |
f\ ft. * /VI i ^ i ^=
R, BUDD^DWYER; TREASURER OF PENNSYLVANIA;
- I r ;^' "** * ' ‘ ■ ■ II ■ ■' ' |^■■..■l■l - 3 i I
TREASURY DEPARTMENT ._ COMMONWEALTH OF PENNSYLVANIA ; DAVIPC ^
”l^W« RBERT , DIRECTOR, .BUREAU OF SOCIAL SECURITY FOR PUBLIC EMPLoWf
DEPARTMENT OF LABOR AND INDUSTRY, COMMO NWEA LTH OF PENNSYLVANIA^U^
WILLIArf^MITH; JOHlC^ORQUATO , OWNER ; JUD%:LLIS, PRESIDENT , COMPt^®^^
TECHNOLOGY AS SOCIATES, I NCORPORATED, NEWPORT' BEACH , CALIFORNIA; [
HOBBS ACT; 00 tPHILADELPHIA ^ '
RE PHILADELPHIA TELETYPE TO THE BUREAU JUNE 25, 19S4, AND
JULY 6, 1984 TELCALL SSRaI
AGE MCY TO BUREAU I
HARRISBURG RESIDENT
UL/X^\;
7‘> : S/^
53 SEP 1019 ^
YCESEHI-
mr 3SHH'.3bi
1-e.f^ +-0
7/1/8^
JUL 1?. 1984
I < '
DETAILS: ALLEGATION WAS RECEIVED FROM THE PENNSYLVANIA AUDITOR
GENERAL’S OFFICE CONCERNING BOTH SUBJECTS IN CONNECTION WITH A
PROGRAM FOR THE RECOVERY OF FICA TAXES WHICH WERE PAID BY PENNSYL-
VANIA EMPLOYEES WHILE THEY WERE ON SICK LEAVE, ALLEGATION BASICALLY
STATES THAT THE LEGISLATIVE BODY OF PENNSYLVANIA ENACTED ACT XXXVIII
DIRECTING THAT THE TREASURER’S OFFICE BE DESIGNATED AS THE OFFICE FOR
THE RECOVERY OF THOSE M ONIES IN THIS PASSED LEGISLATION. •
IN CONCERT WITH THE SUBJECT TORQUATO DRAFTED
THE LEGISLATION WHICH WAS SUBSEQUENTLY INTRODUCED BY
FROM YORK, PA. I IgIVEN VARIOUS CONSIDERATIONS BY , ^
* * * b6
COMPUTER TECHNOLOGY ASSOCIATES (CTA) TO ALSO INCLUDE VARIOUS .b7C
CONSIDERATIONS TO| I DAVID I. HERBERT, ALLEGED TO HAV^E
BEEN OFFERED AND IS TO RECEIVE $ 100,000 INASMUCH AS HE HAS THE
AUTHORITY TO APPROVE THE PAPER WORK SUBMITTED FROM THE SCHOOL
DISTRICTS INVOLVED TO RECOVER THEIR MONIES. THE CTA IS BEING
DESIGNATED AS THE FIRM TO HANDLE THE RESEARCH AND SUBMISSION OF THE
FIGURES TO HERBERT; THEY WILL EXPEDITE THE PAPER WORK IN ORDER TO
RECOVER THE MONIES FROM THE FEDERAL GOVERNMENT. DWYER, WHO IS A
CANDIDATE THIS YEAR FOR THE OFFICE OF THE TREASURER OF THE
PAGE THREE, .PH 194C-3S1, U N 'C L A S ' . ?
COMMOiWEALTH OP PENNSYLVANIA TO RECEIVE A $300,000 CAMPAIGN
CONTRIBUTION FROM CTA. I I haNDLED. NEGOTIATIONS WITH CTA
AMD OVER THE OBJECTION OF'tHE ARTHUR' YOUNG ACCOUNTING FIRM,
WHO OFFERED TO .ACCOMPLISH THE JOB AT A CONSIDERABLE REDUCTION OF-
EXPENSES. CTA WAS AWARDED THE CONTRACT FOR AN ESTIMATED 11.6 PERCENT
OF THE TOTAL RECOVERY WHICH MAY HAVE BEEN APPRO XI MATE -40 MILLION
DOLLARS. ADDITONALLY, AS A GOOD FAITH GESTURE, A. $ 1,000 CONTRIBUTION
WAS PAID BY CTA TO THE STATE OF PENNSYLVANIA REPUBLICAN PARTY AT THE
b6
REQUEST OF SUBJECT SMITH. SMITH’S- JOB WAS TO INCORPORATE TORQUATO ’ S^VC
COMPANY IN THE COMMO NWEALTH OF PENNSYL VA NIA , • THI S. CORPORAT 10 N LISTED
JUDY ELLIS AS PRESIDENT AND ANOTHER FEMALE (NAME UNKNOWN) AS AN
OFFICER IN ORDER TO QUALIFY AS A MINORITY BUSINESS. BY REGISTERING
IN THE COMMONWEALTH, THE CORPORATION WOULD HAVE THE APPEARANCE OF
BEING A PENNSYLVANIA STATE CORPORATION AS OPPOSED TO AN OUT OF STATE
ElfflTY. CONTRACT WAS REPORTEDLY UNDER THE DEPARTMENT OF EDUCATION BUT
WAS CHANGED TO THE TREASURY DEPARTMENT BECAUSE DWIRE WAS TO HELP CTA
OBTAIN THAT CONTRACT. I I . IS REFERRED TO
AS TORQUATQ’S l I . AND WAS TO HEAD UP THE COMMITTEE
WHICH ULTIMATELY SELECTED CTA FOR THE RECOVERY OF THE FICA MONIES.
b6
b7C
•PAGE FOUR, PH 194C-561,U N 'C LA S - . . ' ?
I | , WHO IS A I | F0R the CLEARFIELD SCHOOL DISTRICT,
CLEARFIELD, PENKSYLAMIA , HAS CONSENTED TO PERSONALLY CONTACT DAVID
I. HERBERT AND THROUGH THIS CONTACT. WILL ATTEMPT TO ASCERTAIN WHY
IT IS NECESSARY THAT THE SCHOOL DISTRICT UTILIZES THE, SERVICES OF
CTA INASMUCH AS SOME SCHOOL D ISTRICTS DEEM IT MORE’ FISIABLE FOR THEM
TO CONDUCT THE WORK THEMSELVES AND THEREBY RECEIVE MORE MONIES: FROM
THE RECOVERY. OF THE FICA FUNDS. IF CTA CONDUCTS THE REQUESTED AUDITS
AC® SUBMITS THE PAPERWORK THROUGH' THE STATE , THEN THE STATE- RECEIVES
A PORTION OF THE MONIES AS DOES THE SCHOOL DISTRICT AND THE
INDIVIDUAL EMPLOYEE.! IwiLL NOTE THAT DISCREPENCIES AND QUEs:b6 s
' ' b7C
AS TO WHETHER OR NOT THE CONTRACT CAN BE- HANDLED MORE EFFICIENTLY,
.WHICH WILL ALLOW A GREATER PERCENTAGE OF MONEY TO-BE GAINED BY BOTH
THE SCHOOL DISTRICT AND THE INDIVIDUAL DISTRICT EMPLOYEE INVOLVED.
IN ANY JUDICIAL PROCEEDINGS WHICH MAY AR ISE FROM THIS INVESTIGATION.
U.S. ATTORNEY'S OPINION: AUSA JAMES WEST, MDPA, HARRISBURG, PA,b3
ADVISED THAT \ I
OF
Office of Enforceioent Operations
Criminal Division
9 .
(T. Director^ FBI
ftOcilAL government
gr^Dfat-DWYERi
TREASURER OP PEinifiYI.VAMIA;
July 9, 1984
1 - Mr. E. Walsh,
SQUm ,S.S47,
b7C
“^l^SURY
^BF^TME«T7 COMK K>NWEM.TH:: aP7gE«MSYLV3aaiA^
DAVID 3CKB^BRT7 PIRfe^OR > BUREAU O F SOCIAL
^SECg RITY FOR PUBLIC EMPLOYEBS ,,^D EPA^?MENY OF
- LABOR AND - INDUSTRY . “COkffCm
,WILLIA^^Jfi3ITH7 JOHfiJ^ OWblER; JUdS^ELLIS,
^PRE3IDENT,.JibMPDTBlI*l^CjaN6l^GYl AS^^^ ^
.INCORPORATED ,__NEWPORT BEACH, CALIFORNIA;
HOBBS ACT
At^ched is a copy of a conmiunication which
furnishes information concerning a current investigation.
Exigent circumstances precluded a request for authorization
in advance to utilize an electronic device to monitor and/or
record private conversations with the consent of a party.
Under the provisions of Part III (B) of the Attorney^
General's ffemprandum of November 7, 1983, to Heads of ///
Executive Departments and Agencies entitled, “Monitoring /
Private Conversations with the Consent of a Party." Emergency
monitoring was instituted under the authorization of an
appropriate official of the FBI.
Monitoring of this conversation was authorized in
the best interest of law enforcement in that it was expected
to provide corroborative evidence and to protect the individual
utilizing the eguipsoeht .
Purser monitoring is expected in this matter, and
it is requested that your office approve the use of this 7
equipment for a period of 30 days beginning the date on whicj
you grant approval.
b6
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Enclosure
( 5 )
we AO LES
• I. Dir.i
A4fn. S.tvs,
Crii
NOTE: Emergency^authority was obtained from Section ClLi,eLf
1 ' i! 7 * Hal N. Helt^l^G££ 7 dri^‘’ 7 / 6 / 84 , and relayed to SA Q
PH, by ^Supervisor I J, same da'te.
w.ni PH, Dy supervisor
-‘be
& JUL I’Jj iS84 b7C
J
Off. of Cc-.;3.
& Public Affs._
ffcc. Mgnt.
Tech. Servs.
Training _
l/0odUk<9-
MAILED 16
Airtel
/ b7C
7/16/84
Director , FBI
Philadelphia {194C-361)
R. BUDI^WYER; TREASURER OP PENNSYLVANIA;
DEPARTMENT ,, . COMMONWEALTH : OP..PE^SYLVAiflA ;
DAVID a DIRE CTOR , BDRE^ OP S OCIAL
SECURITY POR'PUBLIC eMlOYEES , DBPART g-gENT OP
LABOR. AND INDUST^, '^MMONl^iM.TH OP. S^SYLVANIA?
^INCORPORATED, NEWORT BEACH, CALIFORNIA; HOBBS ACT
00: PHILADELPHIA ’
RePHtel to the Bureau, 7/6/84, and Butelcal to PH, 7/6/84,
ReButelcal 7/6/84 advised that einergency authority .was
granted for the use of an el pctyonic devl<^a ta m onitor and/or' '
record conversations between pd| b6
and others unknown, I
This is to confirm that written authority has now l^en
obtained from the Criminal Division, Department of Justice, for
the use of electronic device for a period of 30 days beginning 7/11/84,
Within 30 days of expiration of this authorization ,
i dvise FBIHQ regarding the use of this eguipnient through
i ubmission of a FD-621 (see Manual of Investigative Operations
^iind Guidelines (MIOG) , Part II, Section lO’-lO. 3 (6), pa^, 1066,10,
u.^der ’’Consensual Monitoring,’*) J ^ ^
I In ^e event a renewal of this authority is^eemed
warranted, submit your request with full justification. An
-appropriate system should be established so that renewal” adtnor i ty
requests are received at FBIHQ at least seven days prior to the
expiration of the existing authority. JUL lY.
^ In addition, you should insure that all persotts-rearonSKiy
yildenti'fied as having been monitored are suitably included in the
field office and FBIHQ £I£UR indices, cozrmiensurate with existing
instructions as outlined per MIOG, Part II, Section 10-10,5, pages
1066. 10-1066, 12. Strict administrative controls must be established
► -4 nsjure -I Requirements are met,
J ureau' equipment should be afforded appropriatei^cuJi?
Lddkfep/the Bureau advised of pertinent developments
^ Iv/Tk/ < Q’P'C ■Nim'T? -DTkrLT? o
Public Affs. y xv- . ,
R,c. Mgnt. Bureau' equipment, she
T.cY.rv. — W Bureau
SEE NOTE PAGE 2
attached r
k .
NOTE: Emergency authority was obtained from Section Chief
Q N. Helterhoff on 7/6/84, and relayed to SA|
by Supervisor J
See Eureau letter to Office of Enforcement Operations
dated 7/9/84. No Bureau markings or stamps to be placed o
original memorandum.
same date.
b7C
- 2 *
hjvci.O't ia'. ( O K i; } -
TO .s \c. P H! C/ ^ l>£L/Of/( ^
OA'. .:o 7//^/^^
r.D A. 30i^t^ tLd'/e/z -.
t’lLfc VO.
• r 5 J'.f 'U.
%
: '■■-.(■.M')irrj
PHQ3 10 2052 15 IZ
R 232 15 1Z Jit 34 /
m PHlLADELPHIAf ( IS4C-5 6 1> (HRA> (P>
TO DIRECT CR, RBI (ROUTINE)
^JJuLS‘1 2i
U N C L A S /
ATTENTION: VOUCHER AND PAYROLL SECTION
R. BlPDi-DUYElR; TREASURER OF PENNSULVA NIA; ET ALJ HOBBS ACT-CPO;
OOtPHILADELPHIA
IN CONfECT ION WT
AO-Adm,
tax. A0-lnv._
Erse. flO-liS,
Asrt. Cir.:
Cnn).
j t<t3i?2CJiOfl
la^r::trny
le£tt Couil.
(Kf. c< Cong.
£|!*ubltc Alfi..
Koc. UgnX,
Itch. Servs.
Tfatning
T«5epftonc
Director’s Sec'y_
iTremrivE-stiMrio
WAS NECESSARY
SSAN| po WORK THE HOLIDAY THE TOUITH OF JULY IN ORDER^'
TO ACCOMPLISH IMMEDIATE INVESTIGATIVE NEEDS.
VOUCHER AND PAYRCLL SECTION SHOULD PAYT* ABOVE SAS HOLIDAY
PAY FOR THAT PARTICULAR DAY.
C C
13 AUG 29 1984
FBI
TRANSMIT VIA:
□ Teletype
□ Facsimile
1^ AIRTET.
PRECEDENCE;
I 1 Immediate
I I Priority
ra Routine
CLASSIFICATION:
□ TOP SECRET
□ SECRET
O CONFIDENTIAL
□ UNCLAS E F T 0
□ UNCLAS
7/6/84
Date .
TO:
DIRECTOR, FBI
3
SUBJECT:
FROM:, A^^''’'gAC^HILADELPHIA (194-C-361) (HRA) (P)
R. BUDD DWYER, TREASURER^QE-~.EENNSYL VAN lA ;
I I Itreasttry
DEPARTMENT , -C.0™0NWEALTH-,0F--PENNSYLVANIA ;
DA vi D I ZiHE RB ERT , D IREOTOR ,, BUREAU OF
S OCIAL SECURITY-^EOR - .PUBLIC ^EMPLOYEES. , -
DEPARTMENT^OF !lABOR AND INDUSTRY COMMONWEALTH
OF PENNSYLVANIA; WILLIAMpSMITH ;
-"-TTOm^yORduKTOT ^R. / OWNER, C OMPUTER
TEC HNOL OGY ASSOCIATES ,_INC.. (CTA) ,
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NEWPORT BEACH, CALIFORNIA^^
^ JUb\^LL~I S V’ ^PJECE S 7^T A.;>.
HOBBS ACT
(00: PH)
Enclosed for the Bureau are the original and three
copies of a self-explanatory LHM.
The Bureau will be kept advised of developments in
captioned matter.
NTi
Ihifili'i 12 JUL 13 1984
G) - Bureau .(Encs . -4.) -(RMlC^/^
2 - Philadelphia£W94'-ci-^361) (HRA)
^REB:kak
(4) \j\
Approved:
Transmitted
Per
(Number)
(Time)
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In Reply, Please Refer to
File No.
U.S. Departmen^^Justice
Federal Bureau of Investigation
Philadelphia, Pennsylvania
July 6, 1984
R. BUDD DWYER, TREASURER OF PENNSYL VANIA ;
I I TREASURY
DEPARTMENT, COMMONWEALTH OF PENNSYLVANIA;
DAVID I. HERBERT, DIRECTOR, BUREAU OF
SOCIAL SECURITY FOR PUBLIC EMPLOYEES,
DEPARTMENT OF LABOR AND INDUSTRY, COMMONWEALTH
OF PENNSYLVANIA; WILLIAM SMITH;
JOHN TORQUATO, JR., OWNER, COMPUTER
TECHNOLOGY ASSOCIATES, INC. (CTA) ,
NEWPORT BEACH, CALIFORNIA;
JUDY ELLIS, PRESIDENT, CTA;
HOBBS ACT
On April 4, 1984, the Governor of Pennsylvania signed
into law Senate amended House Bill number 1397 which gave the
Treasurer of Pennsylvania the authorization to recover on
behalf of the Commonwealth of Pennsylvania, along with the
State school districts and other school entities. Social
Security overpayments made by employees on sick leave for
the years of 1979, 1980, and, 1981. It further gave the
Treasurer the power to take whatever action he deems reasonable
to recover such overpayments.
On May 10, 1984, the Treasurer's office entered into
a contract with Computer Technology Associates, Inc., (CTA) a
California -based corporation, to recover the above-described
funds. It is estimated that $25 to $40 million will be recovered
under this program. The contract calls for CTA to be paid $7.75
per person per year for this service, which, for the minimum
recovery is approximately $5 million. A proposal from a competing
company, Arthur Young and Company, CPA, with a maximum cost of
$2.8 million for this contract, was rejected.
The Auditor General's office for the Commonwealth of
Pennsylvania tr avelled to Califor nia and interviewed a former
employee of CTA J 1 who resides in Westminster,
This document contains neither recommendations nor conclusions of the
FBI. It is the property of the FBI and is loaned to your agency; it
and its contents are not to be distributed outside your agency.
R. BUDD DWYER, TREASURER OF PENNSYLVANIA?
ET , AL , ? HOBBS ACT
California .
CTA. However^ to reflect this compan:
i
advised John Torquato is the real owner of
^r> hf:> he
lists one Judy Ellis as president I
Torquato, with the assistance of one William Smith, attorney, b6
and presently chairman of the Dauphin County Republican Committee ,
Harrisburg, Pa. , was able to get the Legislature for the Commonweaij^g
of Pennsylvania to pass an amendment to an existing' law allowing tl
Treasurer of Pennsylvania to make the above-described recoveries. ' C,
In addition, David I. Herbert, Director of Social Security for
Public Employees for the Commonwealth of Pen ^iRvl vp^n-i was allegedly
I further advised
flown to California to look over CTA's work.
Torquato had her send a $1,000 check to the Pennsylvania Republican
State Committee at Smith’s request. She later claimed she was
reimbursed this money by Torquato.
I I stated to receive the contract, CTA was to pay
$300,000 to the State Treasurer R. Budd Dwyer's campaign fund from
the profits o f the FICA recovery made for the s chool entities of
Pennsylvania. | | for the Treasurer,
was the committee head who subse quently selected CTA for the
contract. In addition, ! I stated an FICA analysis r eport
at CTA, which was seen by former CTA employee, j j of
Huntingdon Beach, California, had a breakdown of the Pennsylvania
contract costs. This breakdown reflected the amount of $100,000 to
"Herbie", $300,000 to "our guy", and $200,000 to "others". "Herbie"
was identif ied as Her bert and "our guy" was identified as Dwyer.
In addition j [ alleges Pittsburgh, Pa. , and Allegheny County,
Pa., officials. Identities unknown, received $102,000 in payoffs
for FICA recovery work for those areas performed by Torquato. She
further states Herbert was very much involved in aiding CTA's efforts
to obtain the contract and later getting the recoveries processed
expeditiously. The Auditor Gen eral's offi^ ce also contacted and
interviewed former CTA employeq |who confirmed she observed
the above-described contract cost analysis. The Pennsylvania Auditor
General's office t hereafter turned over this informati on to the FBI.
It should be noted F I a Democrat,
is running against Republic an incumben t Treasurer Dwyer for the
State Treasurer's position. I I will undoubtedly make available
the above information to the media in the very near future.
The above information has been discussed with First
Assistant United States Attorney James J. West, Middle District
of Pennsylvania, Harrisburg, Pa. , and it is his intention to
pursue these allegations to their conclusion. He has requested
the FBI to conduct an active and expeditious investigation to
determine the validity of the allegations made.
' PHO006 24 i0i57Z
RR HQ
DE PH
R. 15 7Z AUG 84 y
HECEWeO
TELtTYPE uH J
flZ Uz
FEQl -
^ OF INVtSTlGATlOr
PHIlADEjfPHiA (194C-361) (HRA)
DIRECTOR (ROUTINE)
fxic. AiO-J
Ex.-C AO,l
Exec.
Asst. Dir.:,
jtyim. Sefvs7^
■{2rfln. 1.1^,
70
BT
U N C L A/S
ATTEhT IONi^PAYROLL AND Jf! SITION MANAGEMENT
R. BUDD'’tfWYER, TREASURER. COMMONWEALT.H_Q-ELPENNS.YHiAN-IA-t. ET Al. i
,
La’DOratbty,,^
Ugj! Coo.n...... , '
Oth^oi ..Con^i ;
jBilPuSiJii;
Rei^^’goX-.
I Tccii.;s$tvj;...»— .-4't
I rraiDing ^b 6
I IsiGphona 'y q
i oirsctor’s Sec’,
HOBBS ACT; 00 ;PHILADELPHIA
CAPTIONED MATTER INVOLVES ALLEGATIONS THAT PAYOFFS AND OFFERS
OF PAYOFFS TO OBTAIN F.I.C.A. CONTRACTS FROM VARIOUS GOVERNMENTAL
UNITS. IN VIEW OF THE SERIOUSNESS OF THE ALLEGATIONS, THIS MATTER
FD-621 (Rev. 3-21-84)
TRANSMIT VIA:
□ Teletype
□ Facsimile
S AIRTEL
PRECEDENCE:
□ Immediate
□ Priority
□ Routine
CLASSIFICATION:
□ TOP SECRET
□ SECRET
n CONFIDENTIAL
n UNCLAS E F T O
□ UNCLAS
8/29/84
DIRECTOR. FBI
(ATTN: ELSUR INDEX) .
SAC, PHJ^DELPHIA (194-361)
R. BUDl^WYER , ^ TREASURER,
C OMMONWEALTH OF PENNSYLVANI A;
et al ;^ / (7 1
3 _
HOBBS ' ACT J ^ J)tAl K
JOO: PH) : /
Reference Buairtel to Philadelphia dated 77T6'/84.
. authorization was received from:
□ FBIHQ Criminal Investigative Division (FBIHQ-CID)
^ Department of Justice (DOJ)
for the consensual use of a nontelephone monitoring device in captioned matter.
Prior emergency authorization obtained regarding above: Yes □ No
The following information relates to the use of the equipment authorized that date:
□ Its use aided in directing course of investigation.
□ Its use obtained direct evidence,
a It was used, but no information of value was obtained. , y
□ Its use furnished lead material. ^ * * ^- 7 /^ L <■
□ Its use gave protection to the Agent 'ox other person ^ui^ed w
(More than one of above may apply.)
□ It was not used. .
}d with device.
L_f II vvao iiuL UOC7U. y. ^
SEP
Complete and submit within 30 days of expiration of each and every period of
authorization granted for nontelephone consensual monitoring by either DOJ or FBI HQ-CID1wfielherian Initial
or a subsequent authorization), and, if applicable, for each extension or renewed thereof.
Transmit to FBIHQ in a sealed brown envelope labeled “Director, FBI, ELSUR lndex;j
(Field Office Investigative File)
(Field Office Control File)
(CM #,1402-Na;
Appr6^^ / I
Transmitted
(Number)
FBI/DOJ
FD-36 (Rev. 8-26*82)
TRANS.M'-T VIA:
□ -Tefetype
□ Facsimile
S Airtel
PRECEDENCE:
□ Immediate
□ Priority
□ Routine
CLASSIFICiWDN:
□ TOP SECRET
□ SECRET
□ CONFIDENTIAL
□ UNCLAS E F T O
□ UNCLAS
9/19/84
SUBJECT:
DIRECTOR, FBI
ACTING
SAC, MOBIEE (194C;?.2741<7ruC)
VuJV Cl -
R. BCJDS^ffyER. TRKASIIBRT^ OF • PCTTOSYT.VANT A •
I I TREASURY
DEPARTMENT, COMMONWEALTH OF PENNS.YLVANIA; ,,
DAVID ^^priERBERT7TplRECT0R^.^ByREAU
OF JOCIAL SECURITY FOR PUBLIC EMPLOYEES ,
DEPARTMENT OF LABOR AND.' INDUSTRY ,
'COMMOMj^LTH’^OF PENNS YLVAN I A ;
mLh0MJSHlTEi “ ‘ ‘ ’
"l/fl/lP
COMPUT ER TECHNOL OGY ASSOCIATES , INC. ( CTA) ,
N-gfflg^BEACH rrcAiJEQRNi A7 r~ — Z"
JUD^E^iLIS, PRESIDENT f CTA;
HOBBS'^ACT
00 : PHILADELPHIA
Re Mobile airtel to Bureau dated September ]\7, 1984
Enclosed for Philadelphia only are:
1. The original flnd nnp, r.nUY of FD-
interview on
[ [ city of Mobile.
2 . A 1-A containing original notes of / / p’y\ j
I i nterview. /^^ / / ^ ,
Bureau ^ '
2 - Philadelphia (194,(^^) (HRA) (Enc. - 3) SEP 24 1984
1 - Mobile (194C-274)
DFC/slm ^ .
^ 5 ) ! /o /i / i 1
f (L(L - (/O dO
}qs /sq
Approved:
Z/7y
Transmitted
(Number)
Gownmtnt PrlntJns OfflM: 199*— *31-01 9/»249
1
%
MO 194C-274
3, The original and one copy o f TTri a in? wi t-h
a \ of document from I
I b nd photocopy of document cover
entitled, "CTA Lt d, Systems Application
for FICA Recovery, ! I
City of Mobile, Alabama,”
1 .
1 1
1 V.-.U J
signed JOHN TORQUATO,
resident Marketing,
CTA Ltd.,
Vies PS
c) Fees, Terms, Guarantees and Conditions
which are pages 1, 2 and 3 of the CTA Ltd.
Systems Application for FICA Recovery
booklet.
As requested by Philadelphia, Mobile Division will
retain the original book as evidence in the Mobile Office.
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2 *
FD-36 {Rev. 8
>\
ef
Tf^>JSMlT VIA:
□ Teletype ^ ^
□ Facsimile
E\ Air tel
FBI
PRECEDENCE:
□ immediate
□ Priority
□ Routine
CLASSIFiCATION:
□ TOP SECRET
□ SECRET
□ CONFIDENTIAL
□ UNCLASEFTO
□ UNCLAS .
Date 9/17/84
TO:
FROM:
[SUBJECT:
[
DIRECTOR, FBI
(194C-27A)
rp. I 1^'
QucU I>u}^cr
')
ACTING SAC, MOBILE
R. BUDD^WYER,
^ Treasurer of PennsvY anj^
Treas .urALJ ^epar
Commonwealth of Pennsylvania;
DAVIB"! ^rHERBERT ,
Director,
BOTeaii S oc.ia Insecurity for Public Employ ees ,
DepartirTent of Lab or and Industry",
Common wea 1th of Pe n n s yU^a^ a^-
WI LL I AM^MI TH ;
john£torquato, JR. ,
Owner .
Com puter„T £C±Ln Qj.oqv Associates, Inc.,^C^Ai - ,
North Beach, California;
JUDYJELLIS,
President, CTA;
HOBBS ACT;
00: PHILADELPHIA
Re Philadelphia airtel to Director, datei
Referenced airtel requested Mobile intervie
3
;auest€
Pity
of Mobile, re his contacts
with subject TORQUATO I ~ l and CTA officials concerning
PICA proposal made for recovery of FICA funds for employees
of the City of Mobile. /> ; / /
'! '•r ■
For the inf ,
in the case captioned | |
dba AZALEA CITY PRODU^TIOW^ ; ET AL; t'BW; Mi'; TT5J>, Mobile file
196B-752, the principal subjects of this investigation were
ees . ^
/iif h
Bureau
Philadelphia
2 - Mobile
DFC/mel
(194C-361) (HRA)
Approved: \
Transmitted
■ D7 SEP 20 13S^
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Per
(Number)
(Time)
MO 194C-274
the manager and assistant manager of the Mobile Municipal Auditorium..
(MMA) .
Investigation by thfe Mobile Division has disclosed
that fraudulent activity, including the utilization of double!
settlement sheets, the utilization of roll tickets, in addition
to pre-printed tickets, and the rip-off of concessions, amounted
to hundreds of thousands of dollars. This fraudulent activity
concerned primarily musical groups which appeared at the Mobile
Municipal Auditorium, which can seat a pproxim ately 16,000 people
for such concerts. Trial o j | an<J |was to commence
August 20, 1984 in U.S. District Court, MUblJe, Alabama, wh ich
wnulti invDlvft t.hp! apnpflrannp nf 91 .out-of-state witnesses. I 1
I holds fiscal responsibility
and supervisory control of the management of the Mobile Municipal
Auditorium.
On Au gust 15, 1984, defense attorney for Auditorium
I (indicated to the U.S. Attorney's Office and to
tne UBi tnat nis client was desirous to cooperate and could
provide testimony 1 inkin d | to the auditorium
investigation. On this r <=> | [ g ci i vp1 v i n-^ prvi pwpd
by FBI Agents in the presence of nis attorney. I I statement
es sentially was that l | utilizing his official position
as I tKT auditoriu m ojaetaiion, would ask fo-r and
receive monies from bot] |an{ [monies which I
knew were proceeds from* cbncerts ana snouid have either been
paid to the agent or talent of the concert, or monies that belonged
to the City of Mobile.
On A ugust 16, 1984, defense counsel fo;
c ontacted the U.S. Attorney's Office and the FBI
and advised that his client likewise desired to cooperate in
this investigation in exchange for a plea bargaining arrangement.
I co uld provide s ubstantially the same type of testimony
in that l l asing his official position, had a long continuing
practice of asking for and receiving money from proceeds of
the a uditorium operation and that this pra ctice had been ongoing
since | |
b6
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b6
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FD-36
m
3
FBI
TRANSMIT VIA:
> □ Teletype
\ □ Facsimile "
^ S AIRTEL
PRECEDENCE:
□ Immediate
□ Priority
□ Routine
V
CL^SSIFIp^fiON-
□ "top secret
SECRET
CONFIDENTIAL
UNCLAS E F T O
UNCLAS
Date 10/5/84
□
□
□
□
FROM^
^UB^CT':
Q
XX.
n
o
iii
n
TO:
DIRECTOR, FBI
(Attention: FBI Laboratory, Document
Section, Room 3206)
O, PHILADELPHIA ( 194C-361 ) (HRA) (P)
nnni^I^WVFR . TREASURER^
^CQ]
AT.mH OF
ET AL,
HOBBS ACT C h
TOO: PHILADELPHIA)
^udAi
■^1011005
>Ljyer ~
--lb
Enclosed for the FBI Laboratory Document Section, Room 3206}
is one cash disbursement ledger sheet.
For the information of the FBI Laboratory Document Section ,|
PH is conducting an investigation into bribe?^ and/or payoffs iA \
connection with the awarding of FICA recovery contracts. One ^of^^the
contracts under investigation was for the recovery of FICA fund^^ :^or
the City of Pittsburgh, A computerized cost analysis for theSjCdty
of Pi •n-ghiir'crb rt^f 1 a $10,000 amount to an outside partner ' bv^ th e
name ■ l has been identified as l i
Jof Pittsburgh City Council. Tnvegt-i gabi on has disolosed
a check in the amount of $6,374.86 paid to and deposited by^
b6
b7C
from ALAN STONEMAN, an attorney representing subject, JOHN TORQUATO,
Records obtained from Attorney STONEMAN reflect that a peg-
board system was used for cash disbursements. A review of line 14
of the cash disbursements register reveals that the explanation and ii
account classification number (6) have been changed. PH has been j j/\
unable to determine what appeared in these posit
PH rpcpjypd this dnniTnpnt nn
* ann Indintmenf is, /
Bureau (Enc. 1)
- Philadelphia (194C-361) (HRA)
REB: der
(5)
^Approved
Transmitted
Per
(Number)
(Time)
/i
7-lb
\
REPORT
of the
1 -
LABORJWTORT .
b6
hid
FEDERAL BUREAU OF INVESTIGATION
WASHINGTON, D. C. 20535
SAC, Philadelphia (194C-361) (HRA)
Hovember 5, 1984
Ro:
R* BUDD
TREASURER ,
COMMONWEA LTH OFJE^SYX^VAMIA;
ET AL;
HOBBS ACT
00s Philadelphia
FBI RLE NO.
LAB. NO.
/
41011005 0 UE<
\
Examination requested by:
Reference:
Examination requested:
Specimens received
Philadelphia
Communication dated October 5, 1984
Document
October 11, 1984
Specimens
Q1 Cash disbursement ledger sheet
Result of examination!
It could not be determined what was erased in the
areas under the "6" and "CTA, LTD legal fees for JT" on
line 14 of the Q1 disbursements register*
Specimen Q1 is returned herewith*
Enclosure
LRW;cc#43 (4)
7-2 ( 5 - 12 - 82 ) .
RECORDED
10/3/2/84
FEDERAL BUREAU OF INVESTIGATION
UNITED STATES DEPARTMENT OF JUSTICE
Laboratory Work Sheet
—1-0/11/8 4
r^^be -|
' b7C— '
SAC, Philadelphia (194C-361) (HRA)
P
Re:R. BUDD DWYER, TREASURER,
COMMONWEALTH OF PENNSYLVANIA
ET AL;
HOBBS ACT
00: Philadelphia
Examination requested by: Phi lade Iphi a
Reference: Communication dated October 5, 1984
Examination requested: Document
Specimens received: October 11, 1984
Specimen :
iCa
FBI FILE NO.
/f/-- ^6/3— / 7
LAB. NO.
4Tn4ll005 D UE
b6 ■
YOUR NO.
b7C
Examination by:
l0llS~/Ti
D /ol/S~~
Qi
gash disbursement ledger sheet
\ .
FBl/OOJ
' CT^ ^ L 'T O Q^r\^ ^ ^ ^7Vv_ /H
o{yKL^< D..-<lX..^.<W-<.v-^t^ -
/
7-B (Rev. 1-13-82)
Examiner’s Name ,
Recognition Section:
Date .
.b6
Labff lY ndXP-f//^
1 .
^^10.
19.
28
2.
^ 11
20.
29
3.
12.
21.
30
4.
13.
22.
31
5.
14.
23
32
6.
15.
24.
33
7. _ _
16.
25.
34
8.
17
2fi
35
9.
18.
_ 27.
36.
National Fraudulent Check File
Date Date
Searched Added
Signature Section
Company Name File
Checkwriter Section - Ciasstfied as
Gimmick Section
Master Check Section
Counterfeit Travelers Checks
Counterfeit Money Orders
Counterfeit Checks
— _■ Aitered Travelers Checks
Altered Money Orders
Raised Bank Checks
Checks prepared with False “Certified” Impressions
Checks prepared with Press-On Letters
Stolen Money Orders & Travelers Checks Section:
Travelers Checks - Type # From To #
Money Orders - Type
Photographed:
Date;
Roll#;
FBI/
OOJ
Evidence Files Searched
Section(s) Date Section(s) Date
Searched Searched Added Added
Art
Bank Robbery Note File
Motor Vehicle Title
Anonymous Letter File:
Motive Typewriter Information:
State(s)
ViP
Bombing
Other
Standards Files Searched
Date
Searched
Tire Tread
Shoe Print
Typewriter
Watermark
Office Copier
Safety Paper
Computer Print Out
Remarks:
RECORIjSB
iO/12/84
sgc
FEDERAL BUREAU OF INVESTIGATION
UNITED STATES DEPARTMENT OF JUSTICE
Loboratory Work Sheet
-b7C-
To: 03
SAC, Philadelphia (194C-361) (HRA)
BUDD DWYEH, TREASURER,
COrvMONI-JEALTH OF PENNSYLVANIA;
ET AL ;
HOBBS ACT
FBI FILE NO. / / 76/f b
lab.no. 410011005 D UE
YOUR NO.
Examination by:
00 : Phi lade Iphia
Examination requested by: Philadelphia
Reference: Coitffii'anicatiori dated Octobei" 5, 1984
Examination requested; DOCUIiieiit
Specimens received: OctODer IX, 19«i4
Specimen :
01 ’frrr-origiaaJ. ^sh disbursement ledger sheet
(5)(
FBI/DOJ
NOTICE
DOCUMENT CANNOT BE 'SCANNED
DESCRIPTION
.. PHO>2'0 3000125Z
i'v^ HQ
^ RECEIVED
VELETYPE UN!i
ZbOcT 8 ^ fli 31 ^.'#
OF THvESTi£AT'Q((i V
R 25 0I25Z OCr 84
JfM SAC, PHIL^ELPHIA ( 194C-36 1) (HRA) (P)
[f 0 D IRECi FB I ROUT INE^ /_ , ■ ,-5
H. BUDD DWYEHl Ei AL ; HOBBS ACT; IT AR-BR IBER Y ; CONSPIRAi
tcac. l
\
ltPce,W)-^- — '\ X
U
I ^
ItD^Voty- — -^JDD
.-.•WolCoun— i]3 5
\\ CH. cl Cong* I p
^ |t2C.Wgnl—- ^
W Trc»n»''e.— — ’ J
RE BUREAU TELEPHONE CALL FRO^ SA
OCTOBER 25, 1984,
TO HRA
' FOR THE INFORMATION OF THE BUREAU, SUBJECTS TORQUATO, ELLIS,
;!herb£Rt, smith and stoneman were indicted by a federal grand jury
■;bN OCTOBER 22, 1984, AT HARRISBURG, PA. AND WARRANTS ISSUED. SUBJECTS
i'ARE BEING ALLOWED TO SURRENDER. SUBJECT SMITH APPE .RED BEFORE U.S.
j
^MAGISTRATRE M.D.P.A. OCTOBER 24, 1984, AMD WAS RELEASED OM $10,000
;o.R. BOND. SUBJECT HERBERT APPEARED ON OCTOBER 25, 1934, AND WAS
'.RELEASED ON O.R. BOND. SUBJECT TORQUATO APPEARED ON OC1JI.B EH 25, ^9 84
'|anD WAS RELEASED ON $ 150,000 BOND, AFTER SURRENDERING HIS PASSP^tT^^^
I OCT SO 1984
.'SUBJECTS Sl'ONEMAN AND ELLIS ARE SCHEDULED TO SURRENDER ON
I IWDICT riENT m THIS MATTER WAS DELAYED ONE WEEK BECAUSE ON
joCTOBER 15, 1984, SUBJECT HERBERT REQUESTED AND FAILED AN FBI
IPOLYGHAPH EXAMINAT ION ,■ AFIER WHICH HE ENTERED INTO A PLEA AGREEMENT
PAGE THREE, PH 19AC-361, U N C L A S
WITH THE UNITED STATES ATTORNEY’S OFFICE, WDPA. SUBJECT HERBERT
}■/ ILL PLEA GUILTY TO ONE FIVE YEAR COUNT ' IN EXCHANGE FOR COMPLETE
IcOOPERATION AND HIS TESTIMONY. SUBJECT HERBERT VAS INTERVIEWED
IN DETAIL ON OCTOBER 16, 1984 AND CORROBORATES MUCH OF WHAT WAS
b6
b7C
ICOOPERATION HAS NOT BEEN MADE PUBLIC AT THIS TIME.
INVESTIGATION BY THE FBI AND FEDERAL .GRAND JURY CONTINUING
IlN HARRISBURG AND PITT SB IfiGH' TO DEVELOP FURTHER INFORMATION ON
I'M
HOSE INDIVIDUALS WHO MAY HAVE AGREED TO ACCEPT OR DID ACCEPT,
'illegal offers or PAYMENTS IN THIS MATTER.
COPY OF INDICTMENT FORWARDED TO SA
NDER SEPARATE
b6
b7C
‘ 2 05 Z
nn HQ'/
Lni
R 180305Z OCT SAj ! 9 iiCT flij fl] 15
F^] PH IL AD EL PiH I A Crl^ AC “ )
/ ' i^vt ■ . ii;a rtn»j
tnCC. AD-US^
Asst Cfr.:
Aiia, Slsrvs,_
Cnsi. {Irv.__
DIRECTOR/ ROUTINE
U N C L A S
OF PENNSYLVANIA
(
|TR E A SUR Y^EAR1ME.NT-,,X0 MMO^Vl'EAmr
HERBERT , DIRECTOR, BUREA U oA /]
SOCIAL SECURITY FOR PUBLIC EMPLOYEES, DEPARTMENT OF Lj^C^
AND INDUSTRY, COJ-IMO NWE ALTH 0 F PE NNSYL VANIAJ^WILL lAfr^MIT H ;
J 0 H .yj/oR QUATO , ^R . , 0 W NER , COMPUTER TECHNOLOGY ASSOCIATES, INC.
' CCTA) , NEWPORT BEACH , CA I JUDY ^L IS , PRESJDENT CTA ; ,ALAN
ROGER^ygXJJE,gAi i^ ATTO RNEY, Cl^l HOBBS ACT , 00: PH.
^TLE marked CHAt^GED TO INCLUDE CTA ATTORNEY, ALAN ROGERS
STO NEMAN*
V.28
RE PHILADELPHIA AIRTEL TC
/QO/- - X vW )'
UREAU AUGUST 10, 1934.
FOR THE INFORMATION OF THE BUREAU, U .S . ATTORNEY, DAVID
DART QUEEN, MDPA, HARR ISBURG^^^^^J^ INTE ND S TO PRESENT INDICTMENT
jf
#
PAGE TWO, PH 1940-361 , UNCLAS
TO THE FEDERAL GRAND JURY SITTING IN HARRISBURG, PA, ON
OCTOBER 22, NEXT, AND ANNOUNCE THIS INDICTMENT IN A PRESS
CONFERENCE SCHEDULED FOR THE AM OF OCTOBER 23. AS OF
THIS DATE, THE USA INTENDS TO INDICTE SUBJECTS, TURQUATO ,
ELLIS, HERBERT, SMITH AND STONEMAN FOR VIOLATIONS OF ITAR-
BRIBERY, MAIL FRAUD AND CONSPIRACY. THESE CHARGES WILL SET
FORTH INFORMATION REFLECTING ATTEMPTS TO BRIBE PUBLIC
OFFICIALS IN PENNSYLVANIA INCLUDING THE TREASURER OF THE
COMMONWEALTH OF PENNSYLVANIA AND THE PENNSYLVANIA ATTORNEY
GENERAL IN RETURN FOR FAVORABLE CONSIDERATION CONCERNING
CTA*S ATTEMPTS TO OBTAIN AND IMPLEMENT THE PENNSYLVANIA
STATE FICA RECOVERY CONTRACT.
THE BUREAU WILL BE KEPT APPRISED OF THE PROGRESS IN
THIS MATTER AND A COPY OF THE INDICTMENT WILL BE FORWARDED
UPON RECEIPT .
BT
FD-51 5 (Rev. 2-27-84) ^
ACCOMPLISHMENT REPORT (Effective 10/l)^
(Submit within 30 days from ds
TO:
10/3'l/8-4i^,
Bureau File Number
SAC, wfflixa^lphia
R. #DliM)WYER;
TREASURER, COMMON-
“ WEAimr-a ErEENNS:^!,^
VANIA
ET AL thi^vQ
HOBBS '^T-CONSPIRACfc
ITAR BRIBERY? MAIL
FRAUI^
194C-361
Field Office File Number
4220
joint'operation witr
lother Federal, State o
LE agency * *
case involves
irruption of a pubiic
official (Federal, State or
A. Preliminary Judicial Process
(Number of subjects)
Complaints ‘
Informations
indictments
5
B. Arrests, Locates, Summonses A
Subject Priority (See Reverse) |
Subpoenas (No. of subjects)
A
B
c
FBI Arrests
FBI Locates
5
Investigative Assistance or Technique Used
Were any of the investigative assistance or techniques listed below used in connection m
being claimed? n No ^ - Yes - If Yes, rate each used as follows:
1 K Used, but did not help
2 - Helped, but only minimally
3 = Helped, substantially
4 = Absolutely essential
h accomplishment
3
2. Aircraft
Assistancd
4. Consensu!
Monitoring!
Number of Subjects of FBI Arrests Who Physically Resisted _
Number of Subjects of FBI Arrests Who Were Armed _
Criminal Summons ~ Subpoenas Served _
D. Recoveries, Restitution^
Property or
PELP Type
Code
7. Hypnosis
Assistance
10. UbOiv
Jered Forfeitures
1 . Lab. Div.
Field Suppl
3. Photograpt!
Coverage
16. Show Mono]
Usage
7. Surveil.
Sqd Asst
I. SWAT Team
nb6
r'b7C
Ub7E
li Economic Los^TovonledHPI
Court Ordered forfjil
(Number of Hostages or Children
Hostages Held By Terrorists
Missing or Kidnapped Children b
E. Civil Matters
Amount of Suit
Settlement or Award
Government Defendant
Government Plaintiff
Enter AFA Payment Here
F. Final Judicial Procesa:
Subject 1 - Name -
Convictions (or Final Judicial Process) Date
Subject’s Description Code*-
Combined Sentence ; ]
In-Jall Term
Suspendsct
Probation ^
1 Fines
Yrs
Mos
Yrs
Mos
Yrs
* Jl
Consecutive Sentences - Add all consecutive sentences ibi^er.
Concurrent Sentences - Enter longest single term. Do iVCAdd a
It the sentence is 1 0 years in custody of the Atty <^. but (
In-Jail term would be 2 years. W >
\ H t
neurr^t aentencos together,
yeac/aro^ ^pended, the
im Pretrial
p-j Diversion
d Acquittal
-Convictiona-
Enter conviction and
sentence data in space at
right. If more than four
sections are involved, limit to
the tour most relevant.
Do not report conviction
until sentence has been
pronounced.
□ Felony
[U Misde-
□ Plea
□ Trial
Subject 2 - Name -
D Pretrial
Diversion
U Dismissal
□ Acquittal
-Convictions-
Enter conviction and
sentence data in space at
right. if more than four
sectrons are involved, limit to
the four most relevant.
Do not report conviction
until sentence has been
pronounced.
□ Felony
n Misde-
1 Conviction |
Title
Section
Counts
□ Plea
□ Trial
Combined Sentence |
In-Jall Term
Suspended
Probation
Yrs
Mos
Yrs
Mos
Yrs
Mos
Total Fines
$
Consecutive Sentences - Add all consecutive sentences together.
Concurrent Sentences - Enter longest single term. Do not add concurrent seni
If the sentence is 10 years in custody, of the Atty Gterytuy^yMTS are su
in-Jail term would be 2 years. | \ J
I Subject 3 • Name -
-Convictions-
Enter conviction and
sentence data in space at
right. If more than four
sections are involved, limit to
the tour most relevant.
Do not report conviction
until sentence has been
pronounced.
D Felony
□ Misde-
1 Conviction
Title '
1 Section
Counts
n Plea
D Trial
i
Combined Sen^nce |
In-Jiil Term
Suspended
Probation * '
Mos
Yrs
Mos
Yrs
Mos
Total Fines ,
: I
tNi t'l t
Consecutive Sentences ' Add all consecutiv
Concurrent Ser^tances * Enter longest single
B sentences together.
term. Do not add concurrent sentences together.
If the sentence is 1 0 years
in custody of the Atty.Gen,.but 6 years are suspended, the [
In-Jail temr
would be 2 years.
Attach additional forms if reporting final Judicial process oi
e subjects, end eubmit a final disposition form (R-64) ft
-See
Subjects JOHN R. TORQUATO, ALAN STONEMAN, JUDY ELLIS, DAVID I. HERBERT,
and WILLIAM SMITH indicted by a Federal Grand Jury; MDPA, on 10/22/84,
in a 16-count indictment charging mail fraud, ITAR-Bribery and Conspiracy
and warrants issued. Subjects were allowed to surrender at initial
^g-appearances and are currently free on bond pending trial.
1 al9S^4C-3
(a4C?lJ9'4C-361? 1
See codes on reverse side. Subject description codes in Section
* *ln joint operations, identify the other Federal, State or Local Law Enforcement (LE) agency in the Remarks Section.
DPJ/REB:der
ssJ"
iction F ar^_
b6
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Property Type Codes*
Code
No Description
Potential Economic Loss Prevented (PELP) Type Codes'
No Description
1
1
2
3
4
5
6
7
8
9
10
11
12
20
Cash (U.S. and foreign currency)
Stock, Bonds or Negotiable Instruments (checks, travelers checks,
money orders, certificates of deposit, etc)
General Retail Merchandise (clothing, food, liquor, cigarettes, TVs, etc)
Vehicles (autos, trucks, tractors, trailers, campers, motorcycles, etc)
Heavy Machinery & Equipment (heavy equipment, computers, etc)
Bulk Materials (grain, fuel, raw materials, metals, wire, etc)
Jewelry (including unset precious and semiprecious stones)
Precious Metals (gold, silver, silverware, platinum, etc)
Art, Antiques or Rare Collections
Dangerous Drugs
Weapons or Explosives
Businesses or Assets Forfeited
All Other Recoveries (not falling in any category above)
‘The case file must contain an explanation of the computation of the rec
report if the recovery is $1 million or more, or if the PELP is $5 million o
22 Counterfeit Stocks, Bonds, Currency or Negotiable Instruments
23 Counterfeit or Pirated Sound Recordings or Motion Pictures
24 Bank Theft Scheme Aborted
25 Ransom, Extortion or Bribe Demand Aborted
26 Theft from, or Fraud Against, Government Scheme Aborted
27 Commercial or Industrial Theft Scheme Aborted
30 All Other Potential Economic Loss Prevented (not failing in any
category above)
>very value or loss prevented. An explanation airtel must accompany this
more.
Organized Crime Subjects:
1 A Boss, Underboss or Consigliere
1 B Capodecina or Soldier
1 C Possible LCN Member or Associate
1 D OC Subject Other Than LCN
Subject Description Codes*
• Enter Description Code Oniy When Reporting a. Conviction •
Union Members:
5A international or National Officer
5B Local Officer
5C Union Employee
Government Officials Or Employees;
Known Criminals (Other Than OC Members):
Federal
State
Local
2A Top Ten or l.O. Fugitive
6 A Presidential Appointee
6J Governor
6R Mayor
2B Top Thief
6B U.S. Senator
6K Lt. Governor
2C Top Con Man
6C U.S. Representative
6L Legislator
6S Legislator
Foreign Nationals;
6D Judge
6M Judge
6T Judge
3A Legal Alien
6E Prosecutor
6N Prosecutor
6U Prosecutor
3B Illegal Alien
6F Law Enforcement Officer
6P Law Enforcement Officer
6V Law Enforcement Officer
3C Foreign Official Without Diplomatic Immunity
3D U.N. Employee Without Diplomatic Immunity
6G Fed Exec - GS 1 3 & above
6H Fed EmpI • GS 12 & below
60 All Others • State
6W All Others - Local
3E Foreign Students
3F All Others
Terrorists:
4 A Known Member of a Terrorist Organization
4B Possible Terrorist Member or Sympathizer
Bank Officers or Employees:
7 A Bank Officer
7B Bank Employee
All Others:
8A All Other Subjects (not fitting above categories)
f a subject can be classified in more than one of the categories, select the most appropriate in the circumstance.
Instructions
Subject Priorities for FBi Arrest or Locates:
A - Subject wanted for crimes of violence (i.e. murder, manslaughter, forcible rape, robbery and aggravated assault) or convicted of such crimes in the past five
years.
B - Subjects wanted for crimes involving the loss or destruction of property valued in excess of $25,000 or convicted of such crimes in the past five years.
C - All others
Claiming Convictions Other Than Federal:
It is permissible to claim a local (state, county or local) conviction if the FBI’s investigation significantly contributed to the successful local prosecution. A
succinct narrative setting forth the basis for claiming a local conviction must accompany this report. When claiming a conviction other than Federal, enter the
word “LOCAL” in the Conviction-Section” block, disregard the number of conviction counts, but enter the sentence in the appropriate blocks. Enter "LF” in
. the “In-Jail” block for all life sentences and “CP" for all capital punishment sentences.
Reporting Convictions:
Convictions should not be reported until the sentence has been issued. There are two exceptions to this rule. The conviction information can be submitted
by itself if:
1 . The subject becomes a fugitive after conviction but prior to sentencing.
2. The subject dies after conviction but prior to sentencing.
An explanation is required in the Remarks section for either of the above exceptions.
Rule 20 Situations:
The field office that obtained the process (normally the office of origin) is the office that should claim the conviction, not the office where the subject enters the
plea In cases involving Rule 20 of the Federal Rules of Criminal Procedures,
investigative Assistance or Techniques (lA/Ts) Used: c
-Since more than one lA/T could have contributed to the accomplishment, each lA/T must be rated.
-The lA/T used must be rated each time an accomplishment is claimed. (For example - if informant information was the basis for a complaint, an arrest, a
recovery and a conviction and if separate FD-51 5s are submitted for each of the aforementioned accomplishments, the “Informant Information” block.must be
rated on each FD-51 5 even if it was the siw|M|^formation that contributed to all the accomplishments^
IV
N
4
^)C
SAC. Philadelph ia a9A>361>
(Attention ! SA I
11/23/84
Director, FBI
R. j8TO)D^t3TfERi ' ^U bQ^l>L)yf it
•wm
HOBBS ACT
00 ; Philadelphia
4^.
|b6
lb7C-*
b6
b7C
_ ygrar
dootirt^n^ a per^lnl^ to the OKainlnation
tnuL Ul!
personnel
10/15/84 has been conipleted. This
b6
ffiVldll dIlcI<j3 7Q
essaciinatlon is satisfactory in all aspects and rev:
concur with the results of the examination.
All docmients are enclosed herewith, for appropriate
filing .
Enclosures
1 - Philadelphia <94-454)
(5)
Ex*c AD Adm.
Exec AD Inv.
Exec AD LES
Aist. Dir.:
Adffl. Serva.
Crim. Inv.
Ident.
Intel I.
Lab.
Legol Ceun.
0(1. Cong. &
Public Af(«
Ree. Mgnt.
Tech. Serve.
Training -
Telephone Rm.
Director's See'y
iV-g0-
, .. MOV 2S 1984
FBI / DO J
¥%
'Memorandum 9
11/20/84
Tl g^URY^ D EIEART]y[ENT., ^CQMMONWEALTH :„O F_PENMSYLVANIA j
DAVID f^i^tERBERT, DIREC.t6r.,,BURE AU OF SOCIAL SECURITY
FORJ>UBLIC EMPLOYEES, DEP ARTME NT„QF_.L ABOR . AN D^INDUSTRY'
COMMONWEALTH^OF^PEN^YLVMIA; ^
WILLIAM^MITH; ' J6hN#ORQUATO , OWNER; JUDY ^ELLIS ,
PR ESIDENT /^C OMPUTER TECHN OL OGY ASSO^ ATESy— INC > ,
NEWPORT BEACH, CALIFO RNIA ,;,
HOBBS ACT -*CPO
00 ; PHILADELPHIA
Exae AO Adm
E«*e AO Inv
E*«c AD LEi::-
Ai»f. 0
Adm.
Cfim,
td*nt,
Insp.
W*ll ^
Lob. --
Logoi Coun.
Off. Cong. &
Public Aff.
Roe. Mgnt.
Tech. Sorvo.
Training
Tolophono Rm.
Diroctor'o Soe’y
PURPOSE: To advise of captioned matter.
RECOMMENDATION ; None. For information onlyl
& Fuhlic A^.
Went. Rgo x^gnt. _
tTiSpection Tec.h, Servs.
kitell. Training
DETAILS ; On 4/4/84, the Governor of Pennsylvania signed into
law Senate Bill #1397, which gave the Treasurer of Pennsylvania
the authority, to recover on behalf of the Commonwealth of
Pennsylvania Social Security over-payments made by employees
on sick leave for the years 1979 , 1980, and 1981. It furtherV^;
gave the Treasurer the power to take whatever action he deems
reasonable to recover such over-payments for the employees .
1 - Mr. Revell
1 - Mr. Clarke
CCONTINUED - OVER)
FBI/DOJ
| to Mr, Revel 1 Mamorandtun
Re; R. BUDD DWYER,. TREASURER OF PENNSYLVANIA;
On 5/10/84, the Treasurer's Office entered into a
. contract with .Computer Technology Associates CCTA) , a California
based corporation to recover, the above -describeid funds . It
was estimated that the recovery value would be approximately
25 tO' 40 million dollars . . The contract calls for CTA to receive
$7.75 per person for each year refunds were owed for a minimiim
recovery of 5 million dollars . A proposal from a competing
company , Arthur Young and Company , CPAs , indicated a maximxim
cost of. 2.8 million dollars for the contract which was rejected
by the Treasurer's Office.
On 6/25/84 , | I for the
Commonwealth of Pennsylvania provided the FBI with the results
of his offices' investigation which indicated that CTA had b6
obtained the above-described contracts by promising kickbacks b7c
to subject R. |Rndd nunrpr. Trpasurer for the Commonwealth of
Pennsylvania. I l a former CTA employee, has
indicated that CTA owner John Torquato had promised to pay
$300,000 to the re-election campaign of Dwyer to obtain the
above contracts. In addition, $100,000 was to be paid to
David Herbert, Director of the Bureau of Social Security for
Public Employ ees in Pen nsylvania , and $200,000 was earmarked
for "others". | I learned of these matters throu gh con-
versations with Torquato and from an individual named j |
a CTA computer p^rpgraraer, who placed this information ana
figures into the home computer in Torquato's home which doubles
as an office for CTA.
On 7/6/84, a search warrant was executed at Torquato's
home located at. .214 Colton Street, Newport Beach, California.
Numerous computer related and financial records were
which provided documentation regarding the allegations of
b6 "
b7C
□
On 10/22/84, a Federal grand jury at Harrisburg,
Pennsylvania indicted John R. Torquato, Judy Ellis, William T
Smith, Jr., attorney, Alan R. Stoneman, attorney, David I. Herbert,
and Computer Technology Associates, Inc. charging 16. counts of
Mail Fraud, Conspiracy, and Interstate Transportation in Aid
-it Rack farina fmail fraud and state bribery^ . . The indictment
3 although neither of
these individuals were charged in the indictment. Also mentioned
in the indictment was an entry in the computer of subject Torquato
of $300,000 for someone named Dwyer, however Treasurer Dwyer
was not charged.
0
.■ a
]to Mr. Revell Meinorandiiiti
Re: R. BUDD DWYER, TREASURER OF PENNSYLVANIA;
Investigation determined Q
b6
b7C
knew of the $100,000 campaign contribution offer made to his
press secretary on the day the offer occurred, but no investigation
was undertaken until approximately five weeks later , after
the FBI investigation began.
The indictment in this matter was delayed one week because
on 10/15/84, subject Herbert requested and failed an FBI poly-
graph examination, after which he entered into a plea agreement
with the United States Attorney's Office, MDPA. .Subiect Herbert ?^
will plead guilty to one five year count in exchange for complete
cooperation and his testimony. Subject Herbert was interviewed
in detail of 10/16/84 and corroborates much of what vras alrp adv
known and provided additional information. |
b6
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I Subject Herbert's plea
agreement and cooperation has not been made public at this time.
Investigation by the FBI and Federal grand jury is
continuing in Harrisburg and Pittsburgh to develop further infor-
mation on those individuals who may have agreed to accept or
did accept, illegal offers or payments in this matter.
il'-s
R 292^451 NOV 84
FM PHILADELPHIA
TO I DIRECTOR (S^
HJTINE)
3 0 Nov I i
940-361
ME)
U N C L A
kii
t«5c. flO-Adtn
i Ccc, y tnv.
Cgt?b-L£S _* ^
Asrt.Cv.:
ggrv ^,. ^
I cof«. invAX^
_j {4s?a. /
< t::3ggctiofl
♦^Somtofv
Coun.
JJl. d Cong.
6|F*ut)iic Atft. .
Mgnt., ^
' Tcih. Servs.b O
^rr*vi"e— b7C
CHA NGED : R , ; TREASURE OF PEWNSYLi/-AJj .lA , | | g 1
I ~ > T REASURY DEPARTMENi b7C |
COMMONWEALTH OF PENNSYLVANIA? DAVID i^HERBERT ; FORMER ■fUBE.r..I.C(^ .
BUREAU OF S0CIAL-SE.CUR.1 T-Y_ J'0R .PUB LIC. .EMPLOYEES . ..DEPAR T ME NT. OF. LA f * "
I ^ — — L,
AND INDUSTRY, COMMONWEALTH OF PENNSYLVANIA,;!
COMMONWE ALT H OF P EP.SYL.VANiA
MMMONWEALTlj aF,,_PE.i}.[i5YLI/.A,NIA ;
commonwealth of PENNSYLVANIA J
C OMMONWEALTH OF PENNSYLVANIA ; ROBER^SHER ; CHAIRMAN OF THE.
REPUBbjQfrN STATE COMMITTEE F.OP THF. COMMQ.NWEa OTH flR PE.H HS.YJ..:UA<H-<fet
WTI I TAfl^J^RMTTH. m -HHA TBMa W .JI A IIPH T W COUNTY RE PUBL I CA N _.C.O MMILXEE-{ _.
^ ^ JIITJt:.COUNC-IL , -PltTSBURGH, PA ;,.-U O.HN
ROBERptORTlJATO, JR.; 0«.NER-,*^MPUTER TECHNOLOGY ASSOCIAT^^INC^TA) ,
,2 DEC 18 1934
151985
n\
PAGE TVJO, PH JQ0RC\5^1, UNCLA.S ^
^>C0RT B£ACji,_Ci
mL
5 ^'
JUDY "fell
HOBBS ACT; CONSPIRACY, ITAR -BR IBER Y , MAIL FRAUD;
b7D
TITLE marked CHANGED TO INCLUDE THE NAMES AND TITLES OF SUBJELi^
^‘lITfJ
STO NEMAN AND
SHER , JUDY b6
WELL AS TO CORRECT THE TITL^^^
OF HERBERT AND WILLIAM SMITH.
RE PHILADELPHIA TELEPHONE CALL TO THE BUREAU NOVEMBER 26, 1984 >
AND PHILADELPHIA TELETYPE TO THE BUREAU OCTOBER 25,' 1984.
FOR THE information OF FBIHQ SUBJECT TORTuATO ENTERED INTO A
PLEAS AGREEMENT AND IS COOPERATING WITH THE GOVERNMENT. ON INTERVIE^
TORTUATO CONFIRMS. THAT HE AND SUBJECT VLZLLJ LAM SMITH HAD AN
AGREEMENT WITH TREASURE DwYER UNDER WHICH DWYER WOULD RECEIVE THREE
HUNDRED THOUSAND DOLLARS FOR AWARDING THE STATE SCHOOLS F.I.C.A.
RECOVERY CONTRACT TO C.T.A. TORTUATO INVOLVED] |AND
] IN THE STRATEGY MEETINGS WlTl-^^^^
IF
PROCEEDS. \_
WAS TO RECEIVE ANYTHING FRO
ADVISED
|BUT DOES NOT KNOW
FROM THE
WAS TO RECEIVE
HIS ASSISTANCES. TORTUATO ADVISED THE
THROUGH SUBJECT
FOR
b6
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b6
b7C
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PAGE THREE, PH 194C-3S1, UNCLAS
KNEW OF THE PAYOFF TO DWYER AND SUBJECT WILLIAM SMITH WAS GOING TO
take care of I
[according to TORTUATO DWYER REQUESTED
THROUGH SMITH THAT ONE HUNDRED THOUSAND DOLLARS GO TO HIM PERSONALLY,
ONE HUNDRED THOUSAND DOLLARS TO HIS CAMPAIGN AND ONE HUNDRED
THOUSAND DOLLARS TO THE STATE REPUBLICAN COMMITTEE. WHEN TORTUATO
AND SMITH related DWYER’S REQUEST ABOUT THE METHOD OF PAYMENT OF THE
THREE HUNDRED THOUSAND DOLLARS TO
SAID THE THREE HUNDRED THOUSAND DOLLARS HAD TO COME THROUGH
b6
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□
HIM OR THEY COULD ALL GO TO JAIL. TORTUATO CONFIRMED THE CHECK
IN EXCESS OF SIX THOUSAND DOLLARS WHICH PITTSBURGH CITY COUNCIL
I I re CE IV ED WAS A PAYMENT FOR HIS HELP W ITH THE
PITTSBURGH F.I.C.A. RECOVERY CONTRACT AND STATED THAT | |aLSO
RECEIVED A STOCK OPTION ON A COMPANY FORMED BY TORTUATO. PHILA.
IS IN POSSESSION OF A COPY OF THE STOCK OPTION.
TORTUATO stated THAT SUBJECT WILLIAM SMJTH OFFERED ONE HUNDRED
thousand DOLLARS D IRECTLY Tcf I IN AN
ATTEMPT TO GET AN
PINION WHICH WOULD MAKE THE
F.I.C.A. RECOVERY CONTRACT FOR THE APPROXIMATELY FIVE HUNDRED
PENNSYLVANIA SCHOOL DISTRICT EXCLUSIVELY CTA’S AND NO PERMIT THE
SCHOOL DISTRICT’S CHOICE. INCLUDED IN THE OUTSTANDING INDICTMENT
9
PAGE FOUR, PH 19AC-361, UNCLAS
AGAINST TORTUATO, WILL lAM, SMITH , STONEMAN, HERBERT AND ELLIS IS
A ONE HUNDRED THOUSAND
DOLLAR
OFFER TO
WHICH
|has tesified to.
TORTUATO NEVER MET WITH
I^BOUT THE BRIBE
OFFER personally BUT RELATED A CONVERSATION WITH
AT A POLITICAL FUND RAISER WHERE TORTUATO MADE THE REMARK
WHEN DISCU SSING THE F.I.C.A. RECOVER Y CONTRACT AND TREASURY
DWYER with!
hat. "WHEN YOU BRIBE SOMEONE
YOU THINK THEY’D STAYED BRIBE". TORTUATO STATES THIS CONVERSATION
TOOK PLACE AT A TIME WHEN HE WAS HAVING PROBLEMS WITH THE CONTRACT
AND TREASURE DWYER.
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AS POINTED OUT IN PREVIOUS TELETYPES
IS ON A CRIMINAL LAW ADVISORY BOARD
WILLIAM FRANK SMITH.
TORTUATO AND HERBERT HAVE SIGNED PLEA AGREEMENTS AND ARE
cooperating WITH THE GOVERNMENT. TRIAL FOR SMITH, ELLIS AND
STONEMAN SCHEDULED FOR JANUARY A, 1985. SUBJECT WILLIAM SMITH
IS CURRENTLY NEGOTIATING WITH THE U.S. ATTORNEY, MDPA.
investigation continuing.
BT
234
'->GL O'
DECEMBER Mn ITflM / " UNCLAS PRIORITY
^FBBMIEPP PHXDE Hl2 r4DB3H BHQOHBO^IVUJCP aHHaiBZ DEC 6^
FM DIRECTOR FBI
TO FBI PHILADELPHIA -Cl'mc-3bl> iHRA> PRIORITY
BT
UNCLAS
3
. 0 ?,
0 %^
10 L
8 -
R. BUDD DlilYER-, T REASURER OF PE NNSYLVANj^A ^ ET AL-i HOBBS ACTn
CONSPIRACY^ ITAR'BRIBERYn MAIL FRAUD- 00: PHILADELPHIA-
REPHTEL OF NOVEMBER ET-. ITAM- ^
IN VIEW OF SIGNIFICANT DEVELOPMENTS IN CAPTIONED MATTER-.
PHILADELPHIA IS REQUESTED TO SUBMIT TO FBIHCJ AS SOON AS
POSSIBLE AN LHM SUITABLE FOR DISSEMINATION SUMMARIZING
INVESTIGATION CONDUCTED TO DATE-
BT
b6
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I
1
m
note: captioned NATTER INVOLVES ALLEGATIONS OF KICKBACKS
NADE TO HIGH LEVEL OFFICIALS OF THE CONNONUEALTH OF PENNSYLVANIA
TO SECURE THE AWARD OF A NULTI-NILLION DOLLAR CONTRACT- LAST
LHN WAS SUBMITTED IN JULY-. ITSH- SINCE THEN A NUMBER OF
SIGNIFICANT DEVELOPMENTS HAVE OCCURRED NECESSITATING THE
REQUESTED UPDATE-
I
V-'
\ . .
FD-51 5 (Rev. 2-27-84)
ACCOMPLISHMENT REPORT (Effective 10/1/84|
(Submit within 30 days from date of accomplishment) i
TO: DIRECTOR, FBJ^ "
L Date
^Assistance or Technique Used
12/5/84
si^rM^ELPHIA
■ ^¥ \^UDli!abWYER ;
HOBBS ACT; CONSPIRA(
ITAR-BRIBERY; MF
(00: PHILADELPHIA)
Bureau File Number
194C-361
Field Office File Number
4220
J X if a (oint'operation with
another Federal, State or
Local LE awncy * ‘
coruipUmp^ public
'^^m^jafyeoeraJ, state or
Were any of the investigati^assistance or techniques listed below used/iT connection
being claimed? D No S Yes - If Yes, rafe each used as followse^''
t m Used, but did not help
2 s Helped, but only minimally
3 = Helped, substantially
4 = Absolutety essenbat 16.^
1 . Acctg Tech
Aasitance
2. Aircraft
Assistance
3. Computer
Assistance
4. Consensual
Monitoring
5. ELSUR -
FISC
1 1 . Lab. Div.
Field Suppo
12. Pen
Registers
1 3. Photographii
/I
yfj^graph
r j^ssistance*
1 5. SdSrchiWarr
6. Show Money Rating
Usage
7. Surveil.
Sqd Asst
8. SWAT Team
Action
^b6
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^b7E
t. Preliminary Judicial Process
(Number of subjects)
8. Arrests, Locates, Summonses A
Subpoenas (No. of subjects)
Complaints [ Informatiorft
Subject Priority (See Reverse)
Number of Subjects of FBI Arrests Who Physically Resisted
Number of Subjects of FBI Arrests Who Were Armed
Criminal Summons Subpoenas Served
C. Release of Hostages or Children Located; (Number of Hostages or i
Located]
Hostages Held By Terrorists ; All Other Hostage Situations „
Missing or Kidnapped Children Located
I F. Final Judicial Process; Judicial District ~
: D. Recoveries, Restitutions,
1 Eotf^fnlc Los* Provsnttd (PELP) | |
Property or
PELP Type
Code
Recove nes
Restitutions
Court Ordered Forfeitures
Potential Economic
Loss Prevented
$
$
$
$
S
$
$
$
$
S
$
$
$
$
$
$
$
$
$
$
E. Civil Mattan
Government Defendant
Government Plaintiff
$
$
Settlement or Award
$
$
Enter AFA Payment Hero
Convictions (or Final Judicial Process) Date
Subject's Description Code* -
n Pretrial
I Diversion
I — I Dismissal
□ Acquittal
I Subject 2 - Name -
I n Pretrial |
pubject 3 - Name -
1 O Pretrial I
-Conv'ictvons-
Enter conviction and
sentence data in space at
Convictiorv 1
Title
Section
Counts
□ Plea
n Trial
Conviction [
Title
Section
Counts
D Plea
□ Trial
1 Combined Senteoco |
In-Jall Term
Suspended
Probation
/
Yrs [ Mos
Yrs 1 Mos
Yrs 1 Mos
/ Total Fines
1 - 1 1 -i: 1
Consecutive Sentences - Add all consecutive sentences together.’'
•-'C ~
Concurrent Sentence
- Enter longest single
term. Do not add concurrent sentences together.
If the sentence
5 10 years in custody of the Atty Gen. but B years are suspended, the
In-Jail term would be
years.
i ' J
Enter conviction and ^
sentence data in space at LJ Misde-
right. if more than tour
sections are involved, limit to Q
the four most relevant.
Do not report conviction O Trial
until sentence has been
pronounced.
Subject's Description Code* -
Combined Sentence
Suspended [ Probation
Yrs r Mos I Yrs I Mos
Consecutive Sentences ■ Add all consecutive sentences together.
Concurrent Sentences ■ Enter longest sin^ term. Do not add concurrent sentences together.
If the sentence is 10 years in custody of the Att^Gen. but'8"^ears are.su^lSfttedjJiig u
j SuBjecl's procription Code*-
I f Combined Sentence
In-Jait Term/ [ Suspended T Probation ]
Yre I Mos f Yrs I Mas 1 VYs | Mos Total Fines
Consecutive Sentences - Add ail consecutive sentences together.
Concurrent Sentences - Enter longest single term. Do not add concurrent sentences together.
if the sentence is 1 0 years in custobiTBr me'AftSf'Genr'but 0 'years are'suspended, the
In-Jail term would be 2 years.
I Attach addWfonal toima H reporting IKial jutl'cla) process on moie thin three sul^cte, and submit a flnsf disposition form (R-84) for each subject DEC b >•'
Remarks, 10/22/84, flve individual s and two companies were indicted^in this
matter. The indictment of the two companies - X.E.T., DBA-'-eTA* LTDr;-“and
C.T.A. INC. - were omitted from an FD-515 submitted on 10/31/84, and those
indictments are being reported here. ^
2 ^ Bureau
3lc^Field Office 1” PH 194C-361 (H
•See codes on reverse side. Subject description codes itvS^t
•*ln joint operations, identify the other E^ral, State-0r|L«atiLi
DFJider }r\ /
A^l*- OSM; 1- HRA
^a^ j^uired only when reporting a conviction.
Enforeement (LE) agency in the Remarks Section.
Potential Economic Loss Prevented (PELP) Type Codes'
Property Type Codes*
’ '*.*,’*
Code
No Description
1 Cash (U.S. and foreign currency)
2 Stock, Bonds or Negotiable Instruments (checks, travelers checks,
money orders, certificates of deposit, etc)
3 General Retail Merchandise (clothing, food, liquor, cigarettes, TVs, etc)
4 Vehicles (autos, trucks, tractors, trailers, campers, motorcycles, etc)
5 Heavy Machinery & Equipment (heavy equipment, computers, etc)
6 Bulk Materials (grain, fuel, raw materials, metals, wire, etc)
7 Jewelry (including unset precious and semiprecious stones)
8 Precious Metals (gold, silver, silverware, platinum, etc)
9 Art, Antiques or Rare Collections
1 0 Dangerous Drugs
1 1 Weapons or Explosives
1 2 Businesses or Assets Forfeited
20 All Other Recoveries (not falling in any category above)
Code
No Description
22 Counterfeit Stocks, Bonds, Currency or Negotiable Instruments
23 Counterfeit or Pirated Sound Recordings or Motion Pictures
24 Bank Theft Scheme Aborted
25 Ransom, Extortion or Bribe Demand Aborted
26 Theft from, or Fraud Against, Government Scheme Aborted
27 Commercial or Industrial Theft Scheme Aborted
30 All Other Potential Economic Loss Prevented (not falling in any
category above)
An explanation airtel must accompany this
*The case file must contain an explanation of the computation of the recovery value or loss prevented,
report if the recovery is $1 million or more, or if the PELP is $5 million or more.
Organized Crime Subjects;
1 A Boss, Underboss or Constgliere
1 B Capodecina or Soldier
1C Possible LCN Member or Associate
1 D OC Subject Other Than LCN
Subject Description Codes*
- Enter Description Code Only When Reporting a Conviction -
Union Members:
6A International or National Officer
5B Local Officer
5C Union Employee
Government Officials Or Employees:
Known Criminals (Other Than OC Members);
Federal
State
Local
2A Top Ten or 1.0, Fugitive
6 A Presidential Appointee
6J Governor
6R Mayor
2B Top Thief
6B U.S. Senator
6K Lt. Governor
2C Top Con Man
6C U.S. Representative
6L Legislator
6S Legislator
Foreign Nationals;
6D Judge
6M Judge
6T Judge
3A Legal Alien
6E Prosecutor
6N Prosecutor
6U Prosecutor
3B Illegal Alien
6F Law Enforcement Officer
6P Law Enforcement Officer
6V Law Enforcement Officer
3C Foreign Official Without Diplomatic Immunity
3D U.N. Employee Without Diplomatic Immunity
6G Fed Exec - GS 1 3 S above
6H Fed EmpI - GS 1 2 & below
6Q All Others - State
6W All Others - Local
3E Foreign Students
3F All Others
Terrorists:
4A Known Member of a Terrorist Organization
4B Possible Terrorist Member or Sympathizer
Bank Officers or Employees;
7 A Bank Officer
7B Bank Employee
All Others:
8 A All Other Subjects (not fitting above categories)
*lf a subject can be classified in more than one of the categories, select the most appropriate in the circumstance.
Instructions
Subject Priorities for FBI Arrest or Locates:
A - Subject wanted for crimes of violence (i.e. murder, manslaughter, forcible rape, robbery and aggravated assault) or convicted of such crimes in the past five
years.
B - Subjects wanted for crimes involving the loss or destruction of property valued in excess of $25,000 or convicted of such crimes in the past five years.
C - All others
Claiming Convictions Other Than Federal:
It is permissible to claim a local (state, county or local) conviction if the FBI’s investigation significantly contributed to the successful local prosecution. A
succinct narrative setting forth the basis for claiming a local .conviction must accompany this report. When claiming a conviction other than Federal, enter the
word "LOCAL" in the Conviction-Section" block, disregard the number of conviction counts, but enter the sentence in the appropriate blocks. Enter "LF" in
' the "In-Jail" block tor all life sentences and "CP" for all capital punishment sentences.
Reporting Convictions:
Convictions should not be reported until the sentence has been issued. There are two exceptions to this rule. The conviction information can be submitted
by itself if;
1 . The subject becomes a fugitive after conviction but prior to sentencing.
2. The subject dies after conviction but prior to sentencing.
An explanation is required In the Remarks section (or either of the above exceptions.
Rule 20 Situations;
The field office that obtained the process (normally the office of origin) is the office that should claim the conviction, not the office where the subject enters the
plea in cases involving Rule 20 of the Federal Rules of Criminal Procedures.
Investigative Assistance or Techniques (lA/Ts) Used: < ^
-Since more than one lA/T could have contributed to the accomplishment, each lA/T must be rated. *%.
•The lA/T used must be rated each time an accomplishment is claimed. (For example • if informant information was the basis for a complaint, an arrest, a
recovery and a conviction and if separate FD-Jtt| are submitted for each of the aforementioned accomplj||llients, the "Informant Information” block must be
rated on each FD-515 even if it was the san^^rermatipn that contributed to all the accomplishments.].
PHO024 3460350Z
RR HQ
DE PH
R 100351E DEC 84
RECEIVED
VEi.ETYPE UNIT
IOecE'I 01 (1
PJDERAl BUREAU
aF INVECrlgfeT^
TO
FM PHILADELPHIA . 194C-36 1) (HR AMP)
DIRECTOR ROUTINE /
UNC^A^S o./c/v
R. BUDD DWYER, TRE^URER OF PENNSYLVANIA]
TRE/^UR Y DEPARTME NT , COM MONWE ALTH /
>' I ,
OF PENNSYLVANIA; DAVID I. HERBERT . FORMER DIRECTOR, BUREAU OF SOCIAL''
COMMONWEALTH OF PENNSYLVANIA;
COMMONWEALTH OF PENNSYL^VAN,Iffi[
r
MMMONWEALTH OF PENNS^VAN IaJ
|C0MM0N- '
WEALTH OF PEN N SYL WAN I A J
n, / Ji
WE^TH OF PENNSYLVANIA!
STATE COMMITT EE FOR THE CO M MONWE ALT H OT , PEp SYL VANS A ;iF W;ILbIfrMaT ,
CpSMly^CO -CHAIRMAN , DAUPHIN COUNTY REP UBLICAN COM HUXE E
J I CITY COUNCIL, PITTSBURQH,_PA. ; JOrf M^OBERT
^-T ORQUATO, JR» , OWMElf?^OMPUrER ^ TECHNOLOG Y ASSOCIATES, INlM ^TA) . • ,
S99 JUL2 01985
tr tr
<1 CT;
PAGE TWO
, PH i94C-36l, U N C L A S
^ MEWPQPT BE'ACjh ^ CAL IFORN lA ; JUDY ELLIS, CTA
— '^^xrrn
L^len rog1:r^stoneman ; hobbs act-k:P£>
^ 'blC
CONSPIRACY; ITAR-BRIBERY, MAIL FRAUD'
RE PHILADELPHIA TELETYPE TO THE BUREAU, NOVEMBER 29, 1984 AND
BIREAU TELEPHONE CALL TO HARRISBURG RESIDENT AGENCY, DECEMBER 10,,
1984.
FOR THE INFORMATION OF FBIHQ, SUBJECT TORQUATO ENTERED INTO A
PLEA AGREEMENT AND IS COOPERATING WITH THE GOVERNMENT. ON INTERVIEW^!
TORQUATO CONFIRMS THAT HE AND SUBJECT WILLIAM SMITH HAD AN AGREEMENT
WITH TREASURER DWYER UNDER WHICH DWYER WOULD RECEIVED $300,000 FOR
AWARDING THE STATE SCHOOLS F.I.C.A. RECOVERY CONTRACT TO CTA.
ANDl jiN THE STRATEGY
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TORQUATO INVOLVE
MEETINGS WITH
£
BUT DOES NOT KNOW IH
RECEIVE ANYTHING FROM
□
] WAS
TO
TORQUATO ADVlSEfl
THE PROCEEDS OF THE CONTRACT THROUGH SUBJECT|
ASSISIANCE. TORQUATO ADVISED THAT |
FROM THE PROCEEDS OF THE CONTRACT.
WAS TO RECEIVE FUNDS FROM
I^OR HIS
]knew
OF THE PAYOFF TO DWYER AND SUBJECT WILLIAM SMITH WAS GOING TO TAKE
CARE OfI
ACCORDING TO TORQUATO, DWYER REQUESTED THROUGH
SMITH THAT $ 100,000 GO TO HIM PERSONALLY, $ 100,000 TO HIS CAMPAIGN
PAGE THREE, PH 194C-3SI, U N C L A S
AND $ 100,000 X0 THE STATE REPUBLICAN COMMITTEE. WHEN TORQUATO AND
SMITH RELATED DWYER'S REQUEST ABOUT THE METHOD OF PAYMENT FOR THE
$300,000 TO I
SAID THE $300,000
HAD TO COME THROUGH HIM OR THEY COULD ALL GO TO JAIL. TORQUATO
CONFIRMED THE CHECK IN EXCESS OF $6,000 WHICH PITTSBURGH CITY
Received for the payment for his help
WITH PITTSBURGH F.I.C.A. RECOVERY CONTRACT AND STATED THAT
ALSO RECEIVED A STOCK OPTION ON A COMPANY FORMED BY TORQUATO FOR
HIS ASSISTANCE. PHILADELPHIA IS IN POSSESSION OF A COPY OF STOCK
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OPT ION.
TORQUATO STATED THAT SUBJECT WILLIAM SMITH OFFERED $100,000
CONTRACT FOR THE APPROXIMATELY 500 PENNSYLVANIA SCHOOL DISTRICTS
EXCLUSIVELY CTA'S AND NOT PERMIT THE SCHOOL DISTRICTS A CHOICE.
INCLUDED IN THE OUTSTANDING INDICTMENT AGAINST TORQUATO, W ILLIAM
SMITH, STONEMAN, HERBERT AND ELLIS IS A $100,000 OFFER TO
TESTIFIED TO BEFORE A FEDERAL GRAND JURY. TORQUATO NEVER MET WITH
I ABOUT THE BRIBE OFFER PERSONALLY BUI
b6
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b3
t
PAGE FOlffi, PH 194C-361, U H C U A S
RELATED A CONVERSATIOS WITH I
iT A POLITICAL
FUND-RAISER WHERE TOROUATO MADE THE REMARK WHEN DISCUSSING THE
F.I.C.A. RECOVERY CONTRACT AND TREASURER DWYER WITf
TORQUATO STATES THIS CONVERSATION TOOK PLACE AT A TIME WHEN HE S .S
H VING PROBLEMS WITH THE CONTR CT ND D^YER .
TORQU TO ND HERBERT H VE SIGNED PLE GREEMENTS ND RE
COOPER TING WITH THE GOVERNMENT. TR I L FOR SMITH, ELLIS AND
SrONEMAN IS SCHEDULED FOR JANUARY 4, 1985. SUBJECT WILLIAM SMITH
IS CURRENTLY NEGOTIATING WITH THE UNITED STATES ATTORNEY, MDPA. , ^
DD
ON SATURDAY, DECEMBER 8, 19 84, AN ORAL OFFER OF PROOF WAS b7C
RECEIVED FROM I L ON BEHALF OF HIS CLIENT
SUBJECT DAUPHIN COUNTY REPUBLICAN CHAIRMAN WILLIAM T. SMITH.
IN EXCHANGE FOR A CERTAIN ATTORNEY GENERALS OPINION ON THE F.I.C.A.
RECOVERY CONTRACT FOR THE PENNSYLVANIA SCHOOL EMPLOYEES. SUBJECT
SMITH ALLEGEDLY HAS A WITNESS TO HIS SIDE OF THE TELEPHONE
CONVERSATION WHEN THE OFFER WAS MADE. SUBJECT SMITH WAS THEN
REFERRED BY
PAGE FIVE, PH 194C-36I, U N C L A S
WITH RESPECT TO OTHER DEFENDANTS, SUBJECT SMITH CAN PROVIDE
INFORMATION AND A CORROBORATING WITNESS WITH RESPECT TO PENNSY LVANIA
I I AND
TESTIMONY AGAINST TREASURER R. BUDD DWYER.
NEGOTIAriONS WITH SMITH ARE NOT CONCLUDED AS HE WANTS IMMUNITY
FROM PROSECUTION AND IS CURRENTLY PENDING TRIAL IN INSTANT MATTER.
IT IS THE GOVERNMENTS POSITION AT THIS TIME THAT IMMUNITY IS OUT OF
THE QUESTION /EN&AH OFFER OF A PLEA TO ONE FIVE YEAR COU<T HAS BEEN
MADE TO SUBJECT SMITH. SUBJECT SMITH IS SCHEDULED FOR TRIAL IN
JANUARY, 1985 AFTER WHICH THE GOVERNMENT INTENDS TO IMMUNIZE SMITH
AND COMPEL HIS TESTIMONY. IT IS REQUESTED THAT THE INFORMATION
CONTAINED IN THE OFFER APPROVED NOT BE DISCLOSED THE BUREAU AT THIS
T IME.
bfb6
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PHILADELPHIA, AT HARRISBURG, PA.;
INVESTIGATION CONTINUING
1,2/11/84
Aa^
ET AL . ;
HOBBS ACT; CONSPIRACY;
MAIL FRAUD^^
/v '' I ' ) ' '
ITAR-BRIBERY;
As you ar e aware, Pennsylvania State l I
I I is a subject of this investigation which
involves orioes and campaign contributions made 'by Computer
Technology Associates (CTA) . The bribes and campaign
contributions by CTA were to influence the obtaining of a
contract with the State of Pennsylvania to recover Social
Security over-payments made by State employees on sick leave
for the period 1979 through 1981.
On 12/10/84, t he Public I ntegrity Section, Departmentb6
of Justice, advised that ) ~| is being prominently /■'"b7C
v^entioned to head the President' s Commission on Pornography7
It is also noted that| |is on the U. S. Attorney/ /
General's Advisary BoaYd . ’
The Philadelphia Office has reported that thej^U.
Attorney in Phila de lphia has advi sed] |
I | of | ^ nvoivemeiii: in me inves'cigarj.un.
I [ has be en interview ed regarding alleged offers
of campaign contributions . | | will be notified by the
U. S. Attorney's Office within the next two or three. weeks thaj.^. ,
he is a target of this investigation. [ Kfi jc
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Btigation
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O. B. Revell
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DIRECTOR, FBI
(ROUTINE)
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, Director's Sec'y. i
TREASURER, COMMOtWEALTH OF PENNSYLVANIA, ET AL;
MAIL fraud, ITAR-BRIBERY, CONSPIRACY, HOBBS ACT. 00:PHILA
FOR THE INFORMATION OF THE BUREAU, TARGET LETTERS^RE BEING
DELIVERED TO STATE REPUBLICAN CHAIRMAN ROBERT ASHER, TREASURER
R. BUDD DWYER, A® I I TRIA^'fN INSTANT
MATTER AGAINST INDIVIDUALS CURRENTLY UNDER INDICTMENT SCHEDULED FOR
JURY SELECTION JANUARY lA, 1985, TRIAL TO BEGIN FEBRUARY 5, 1985.
iqLj -
«0 JAN 11 1885
AUSA.
DUE TO THE NATURE AND VOLUHE OF THE I1AJORITY OF THE INFORflA-
b6
TION ANTICIPATED TO BE REFLECTED FROn SUCH A SEARCH-, FBIH(3 ELSI]37q^q.;
INDEX CANNOT RESPOND TO THE PHILADELPHIA RE(3UEST. PLEASE NOTE
DEPARTMENT OF JUSTICE
FEDERAL BUREAU OF INVESTIGATION
COMMUNICATION MESSAGE FORM
0-93A
(7-19-77)
CONTINUATION SHEET
DE H(2 OaS^ UNCLAS E F T 0
70\J
PHILADELPH IA IS INSTRUCTED TO REVIEW THE niOG-, PART II-.
SECTION ENTITLED "RE(3UESTS FOR ELSUR CHECKS-" ELSUR
16
^g|_SEARCHES SUCH AS THAT APPARENTLY REC3UESTED BY THE AUSA SHOULD BE
REFERRED TO OR AT LEAST DISCUSSED WITH THE APPROPRIATE SUPER-
VISING ATTORNEY AT THE DEPARTMENT OF JUSTICE RESPONSIBLE FOR
THE COORDINATION OF ALL SUCH REfSUESTS- SHOULD THERE BE ANY
QUESTIONS WITH REGARD TO THIS PROCEDURE-, PLEASE REFER THEM TO
YOUR FIELD OFFICE ELSUR COORDINATOR OR CONTACT FBIH(2 ELSUR
INDEX ON EXTENSION
14
12
BT
DO NOT TYPS AASSSAGE BELLOW THIS LINE
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